Legal News
Survey Reveals August Fall In House Prices (7 September 2011)
Date: 07/09/2011
A Nationwide survey has shown a 0.6 per cent fall in house prices in August and a 0.4 per cent year-on-year decrease. These latest figures have surprising economists who predicted house prices to remain steady. The building society's monthly insight into the housing market revealed that the average price of a UK home fell by £2,817 over August to £165,914 - 0.4 per cent lower than in August of last year.
Nationwide’s chief economist, Robert Gardner, regards the housing market as a "picture of relative stability". Mr Gardner expects the stability to continue until at least the end of 2011. However, he warns that an increase in unemployment may result in sharper falls in house prices. IHS Global Insight’s chief UK economist, Howard Archer, claims that the latest figures were not in contrast with his prediction that house prices would fall.
Mr Archer states that the fall in house prices in August corresponds with the belief that house prices will trend down gradually due to consistently weak economic activity, increasing unemployment rates, and low consumer confidence. He predicts that by mid-2012, house prices will have fallen by approximately five per cent. Mr Archer suspects that the squeeze on household budgets, tight fiscal policies, a weakening labour market, and consumer concern over the economy will cause potential buyers to refrain from making purchases. Furthermore, the difficulties in acquiring a mortgage will deter first-time buyers.
The results of Nationwide's survey have been based upon its own mortgage approval in the previous month. Consequently, the survey is not applicable to the market as a whole. Data from the Land Registry, based on completed house sales across England and Wales, have shown larger annual price falls in recent months in comparison to Nationwide’s survey.
Duncan Lewis’ Housing and Conveyancing solicitors can provide you with the advice you require on a range of housing issues. The departments are committed to providing clients with the highest possible level of assistance.