July 30, 2010
The nation’s house prices have undergone a set-back following spring optimism as the average price falls for the first time since February, new figures show.
Between June and July this year, the average price of a UK property dropped slightly by 0.5% to £169,347, according to the Nationwide Building Society.
Experts claim the dip can be explained by house hunters no longer displaying the same hunger for property. The new government’s attack on the public sector and controversial annual Budget have forced many buyers to reconsider their employment stability and obtaining a home is no longer their top priority.
The scrapping of home information packs (HIPS) has also not gone as intended, with more sellers flooding the market forcing supply to outstrip demand. July's fall comes after growth stalled in June, although prices still remain higher on a year-on-year basis.
In addition, despite record low interest rates and a stamp duty holiday for most first-time buyers, the recession is still biting, as the number of properties changing hands across the UK displays half the levels seen prior to the financial crisis.
"A combination of restrictive credit conditions and uncertainty about the future economic outlook continues to limit the pool of buyers to those with relatively large financial resources. Many potential buyers still lack the confidence to purchase their first home or trade up when faced with uncertainty over future income and employment prospects, commented Martin Gahbauer, Nationwide’s Chief Economist.
But the future is still unwritten and experts are not jumping to conclusions about downturn just yet.
Those looking for a new property should take advantage of lower prices and make their move up the property ladder while the market is still unsure of its future.
"It will take several more months to establish whether house prices are now simply oscillating around a flat price trend or whether a period of downward trending prices may be in store," added Mr Gahbauer.
Speak to property solicitors today if you’re considering entering the property market or putting your home up for sale.
