Property market remains subdued

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The Independent Online

House prices remained broadly unchanged during September as activity in the market continued to be muted, figures showed today.

The cost of a home edged ahead by just 0.1% during the month, following a 0.8% slide in August, to leave the average property worth £166,757, according to Nationwide.

But the quarter-on-quarter growth rate, which is generally seen as a smoother indicator of market trends, turned negative for the first time since May 2009, with prices falling by 0.9% during the three months to the end of September.

The group said the figure was consistent with the "clear loosening of housing market conditions" over the summer.

But it stressed that it did not point to a "significant pace of decline" in property values, while it remained well down on quarterly falls of 5.5% seen during the 2008 housing market correction.

A recent run of gloomy data on the property market has led many economists to predict house prices are heading for a double dip.

But Martin Gahbauer, Nationwide's chief economist, said the future direction of prices would depend on whether the strong flow of new properties coming on to the market continued into the autumn.

He said many new sellers may be testing the water in response to the price gains seen in 2009 and the end of Home Information Packs.

He said these people were likely to have little urgency to sell, and house prices were likely to remain broadly stable, although this would be at the expense of market activity.

Mr Gahbauer said: "The housing market would then be characterised by a stalemate situation with low levels of liquidity and little change in house prices."

But he warned: "If, on the other hand, most of the new sellers in the market are keen to sell more quickly, then the recent slight downward trend in prices may continue."

Today's figures come the day after Bank of England data showed the number of mortgages approved for house purchase had slumped to a six-month low in August.

Approvals have been running at less than 50,000 a month since the end of the stamp duty holiday in December, well below the 70,000 to 80,000 economists consider necessary for stable house prices.

Nationwide's data showed that house prices fell in all regions of the UK during the third quarter, apart from Northern Ireland, London, the outer metropolitan area and the outer South East.

Northern Ireland saw the strongest gain at 1.6%, followed by the outer metropolitan area at 0.7%.

But prices dipped by 3.4% in Scotland, while they were down by 2.7% and 2% in Yorkshire and Humberside and the South West respectively.