House prices fall amid shortage of buyers

By Holly Williams, Press Association

Thursday, 29 July 2010

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A shortage of buyers sent house prices falling in July for the first time since February, figures showed today.

The average price of a UK property dropped 0.5% to £169,347 between June and July, according to Nationwide Building Society.

It said the fall came as househunter numbers dwindled amid uncertainty over jobs and the wider economy as the Government ramped up its austerity drive.

The scrapping of home information packs (Hips) also tempted more sellers on to the market, which has seen supply outstrip demand.

July's fall comes after growth stalled in June, although prices remain higher on a year-on-year basis.

Nationwide said prices were 6.6% higher on an annual basis in July - lower than the 8.7% in June.

It added that, despite record low interest rates and a stamp duty holiday for most first-time buyers, the number of properties changing hands across the UK is running at half the levels seen prior to the financial crisis.

Martin Gahbauer, Nationwide's chief economist, said: "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."

He said it would take several months to establish if the market is on a downward trend, or if prices are merely flattening out.

However, a gloomy prediction yesterday from forecasting body the National Institute of Economic and Social Research (NIESR) suggested the market is on a clear path down.

The group warned that house prices would fall by around 8% over the next five years, with inflation taken into account, as the Government's austerity measures hit confidence.

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Dissavowed

Just tried to post another comment on another story the Independent are running on housing, through Disquss, after the comments here 'dissapeared' yesterday. Instead of posting the comments automatically, I am now met with a message, telling me all comments will be 'moderated' [I would add, that is probably the 10th time that comments Ive made have under housing stories, in the last 16 months, underneath Independent stories on housing which also 'dissapeared' within hours of posting them. [Everytime this happened I sent Emails to the tech guy at Independent who stated he didnt know the reason why.....]
Dissavowed

To answer the first part of your question. If all house prices fall, it would make no difference to what type, or kind of property you would be able to downsize to. The actual price would be immaterial. In fact you would save money, as the lower the prices of the houses involved in the transaction, would attract lower costs I.E Stamp Duty, and 'exchange taxes' , saving you money. The second part of your question is not really anything to do with house prices. If you have savings, or pensions, I hope you have been able to get a fair return, instead of having your Interest Rates stolen, to pay for this toxic mortgage debt and Re-funding the Banks.
Dissavowed

If you are well over 70. Try writing down your concerns and questions, and sitting down with your children, to discuss it. Western Society, especially the family unit needs to rethink the way it treats its elderly people. Of course, many people of your generation, feel mortified at being 'a burden'. You should not feel that way.
Dissavowed

The Labour party, under Brown, as chancellor, stopped tax relief on pension funds in 1997. The treasury issued many stern warnings about what would happen. Including that those funds would then be channelled into other investments, noting, direct property investment, or Buy to Let portfolios. Brown, meglomaniac, ignored this warning. Browns ineptitude created the cornerstone of the debt bubble. In the ten years previous to Browns Raid on pensions, From 1987 to 1997 the Average House Price rose from �40k to �55k. A 33.3% rise over ten years. From 1997 to 2007, the Average House Price rose from �55k to �190k [Nationwide Building Society figures] A staggering 245% increase over the same period. [Ten years.] There is NO shortage of houses. What is happening now, is that your money is being stolen, through QE, Low IR, increased taxes, morgate relief, to pay for this toxic mortgage debt, to bail out the banks. You are having your money stolen, in effect, to pay for other peoples houses. Whilst keeping you in debt slavery. That is what the Labour party have done. A debt transfer has taken place. Its unfair, amoral, criminal, theft. Performed by the State. By The Labour party. The party with an extremely twisted ideology, who hope that the public are too dumb, or complacent to realise what has happened. So we are Working for nothing. No capital. Unable to get ahead in life. unable to get onto the ladder. Why? Because of Labours enforced lack of regulation of the Banks, and sheer evil policies, and incompetence. We have been forced to waste tens of thousands in rent. If Labour had adhered to Browns 1997 promise, 'I will not let house prices get out of control' Im sure we would have got a mortgage, years ago, and paid off most of it. Instead of paying off the mortgage of a landlord who took out a liar loan from the Bradford and Bingley, and was able, because of Labours enforced lack of regulation of the banks, to borrow enough money to buy a number of houses, by lying about his income. [Look at Gordon Browns Mansion house Risk speeches, as late as 2006, as the blame lies firmly with Labour, despite their lies] With such a ridiculosly high rise, whats a 20% drop? Nothing. The governmnet, media interests, and banks are trying to 'engineer' a bottom in the housing market. Dont fall for it. If you are a FTB refuse to buy, until they return to 3x salary of an average wage earner in your area. Do not believe Estate Agents as they lie for a living. Not an insult. Simply the truth. If they can fall 30%, they can easily fall 60%, and there are many examples of this already happening. [yest they remain overpriced. Look on propertybee, and propertysnake] House prices will overshoot on the way down. And remember, the majority of these journalists have a vested interest, as they own houses. And journalistic impartiality, does not exist, on the subject. Maybe the governmnet should consider the implications of such draconian actions. Such as a Serious Tax Revolt. [Reposted at 12:48pm]
guayacan

I am getting tired of this "house-price" dribble. These prices are kept artificially high so as not to cause a collapse in property value, and therefore massive hikes in bank risk (and huge losses for them). Unfortunately the banks run the show. They control the mortgages, and interest on them (irrelevant of what they borrow for). The general public can't afford reasonable housing any longer, and this is set to get worse. The govt do nothing about it even though the tax payers own the damn banks. The best way to shake up the banks, get housing moving, stimulate the building industry and help people buy property is to tax income from second (or more) homes at 50%. This blows out the buy-to-let market and the greed it stands for. Property is a necessity, and therefore parasites that earn from the misery caused by these ransoms, should be penalised. People only need one house, and we have a national wealth of investment opportunities in other areas. Buy-to-let is a business, a greedy and selfish one. So get the govt to tax it as the public see fit, not the banks. Reposted @12.37pm
aegian

Perhaps you could give your house to your three children outright and legally and ask them in return to stump up, between them, enough money so you can rent a small flat?
why_me

i live in switzerland in rented accommodation of quality- i'm a brit been here ages - the building is owned by a pension fund - i pay rent - a pensioner gets the benefit - when i am old i'll get a pension to pay my rent - safe as houses - just a different route and ... speculation is suppressed by tax law think outside the box !
LoveIsOnlyRequired

I dont worry about any coming crash but I rather invite it. Change in everything is needed. Let the big change come and may be some people will start to wake up from their slumber of lake of confidence, downright selfishness and laziness due to their own fears. Let the be crumble occur and phoenix rise from the ashes. Maybe the highlight of the majority will change from getting rat faced and seeking someone of the opposite (or same) sex to more empowering love entrenching activities. or am I being too optimistic?
Celia Bircumshaw

Many of us are trapped in the house sale impasse. We have been trying to sell our property for over two years and have had minimal interest even though we have dropped our price by 1/3rd. As we are both well over 70 we are desperate to downsize but also feel we could not give the house away under present circumstances. The question no one seems to consider. is what happens to people like us if we need care and cannot sell? Would the house be repossessed? We want to leave inheritance to our three children but cannot see a way out of this situation.Has anyone out there got a suggestion for a way forward?
Dissavowed

Why can I no longer see the comments under this article?