'Few signs' of house price rebound, says Nationwide
Thursday 28 June 2012
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.
Life & Style blogs
Isis threat: Cameron wants an alliance with Iran
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Crisis? What crisis? A visiting US doctor gives the NHS a rave review
Russell Brand calls for Israel boycott: Comedian urges big businesses that 'facilitate the oppression of people in Gaza' to pull funding
Ukip MEP calls for reintroduction of death penalty on fiftieth anniversary of last deaths
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
- 1 Michael Brown shooting: Police shoot and kill second young black man near Ferguson
- 2 James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
- 3 Why are UK rail fares so expensive?
- 4 Here’s the damning letter Robin Williams wrote to his Mrs Doubtfire co-star's principal after they expelled her
- 5 Cilla Black defends Cliff Richard: 'I am positive that the allegations are without foundation'
£450 - £600 per day: Harrington Starr: Business Analyst Solvency II SME (Pilla...
£350 - £365 per day: Orgtel: Manager, SAS, Data Warehouse, Banking, Bristol - ...
£35000 - £43000 Per Annum plus excellent benefits: Clearwater People Solutions...
£40000 - £45000 per annum: Harrington Starr: One of the best known and most pr...