'Few signs' of house price rebound, says Nationwide

 

House prices have recorded their weakest annual growth in nearly
three years amid the "challenging" economy, the Nationwide said today.

Prices slipped 1.5% year-on-year in June to £165,738 on average, the biggest fall since August 2009, according to the building society's latest house price index.

The study suggested the decline, which also showed a 0.6% month-on-month decrease, was partly due to the ending of a stamp duty concession for first-time buyers in March, which had the effect of bunching up sales.

It said there were "few signs of a near-term rebound", as economic conditions remain tough.

Robert Gardner, Nationwide's chief economist, said prices are likely to remain "fairly stable" over the next 12 months amid a lack of homes on the market, continuing a trend seen over the past two years.

There are hopes that a "funding for lending" scheme announced by the Bank of England and the Treasury earlier this month could help kick-start lending.

Analysts have said this may put the brakes on recent rate increases although those currently unable to get a mortgage may see little improvement.

Mr Gardner said: "The slightly weaker trend we've observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near-term rebound."

He added: "Economic conditions are expected to remain challenging over the next 12 months. However, policymakers' efforts to bolster the supply of credit to the economy and to help lower the cost should provide support to demand.

"Moreover, the supply side of the market is still constrained, with construction failing to keep pace with the number of new households being formed.

"Overall, this suggests a continuation of the pattern experienced over the past two years, with prices remaining fairly stable over the next 12 months."

Nationwide said the volatility caused by the ending of the stamp duty holiday for first-time buyers made it even harder to uncover the underlying trend. Mortgage lending to first-time buyers in March totalled £3 billion, around 40% above usual levels.

Nationwide estimated that more than 200,000 first-time buyers benefited from the concession during the two years it was in place, saving a total of nearly £375 million or around £1,800 each.

British Bankers' Association (BBA) figures released yesterday showed that mortgage repayments outstripped lending for the first time last month as Britain's households became more cautious.

Net mortgage lending declined by £73 million - the first reversal in the 16 years that records have been compiled by the BBA.

Households have been focusing on paying down their debts, but it has also become more difficult to take out a mortgage in recent months as lenders have been tightening their borrowing criteria and raising their rates in response to the weak economy and the ongoing eurozone crisis.

PA

Discover more property articles at Homes and Property
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Duty Manager

Negotiable: Recruitment Genius: A Duty Manager is required to join one of the ...

Recruitment Genius: Team Leader

Negotiable: Recruitment Genius: A Team Leader is required to join one of the l...

Recruitment Genius: Chef

Negotiable: Recruitment Genius: A Chef is required to join one of the largest ...

Recruitment Genius: Customer Service Assistant

Negotiable: Recruitment Genius: A Customer Service Assistant is required to jo...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor