uk house prices look set to fall
News Posted On: 29 July 2010
The Nationwide index has caught up with that of rival Halifax in showing that the upward trend in UK house prices is over, and we are once again heading downwards. Halifax has shown prices falling for the last 3 months, with a 0.6% contraction in June. But according to Nationwide, prices rose 0.1% in June, slowing from a 0.5% rise in May, to a contraction of 0.5% in July.
This comes as little surprise to those watching the market. The new Tory-Liberal coalition government's suspension of mandatory Home Information Packs, by saving prospective sellers over £100 has had an immediate and lasting effect on supply, which has risen sharply since the suspension came into effect.
Weak supply had been propping the market up since last year, and the 20% rise (Rightmove) in supply since the announcement would have likely been enough to end the growth, but with demand now also falling the picture is becoming a lot worse a lot faster.
According to the most recent Rightmove index, supply growth accelerated 22% between May and June, from 27,235 to 33,149 houses coming onto the market each week.
Meanwhile British Bankers Association data shows that 36,709 mortgages were approved for house purchase in May, approximately 8470 each week. It doesn't take a genius to work out that this leaves an oversupply of almost 20,000 homes every week, which will of course be cut into by cash buyers, but still the figures don't look pretty. Prices look destined to fall further this year, and there could be some bargain UK properties to come.
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