According to the Nationwide Building Society, price growth in the housing market finally ground to a halt in July as prices fell 0.5% over the month for the first time in five months. Annual property price growth also fell from 8.7% to 6.6%, largely due to a shortage of buyers.
Martin Gahbauer, Nationwide’s chief economist, said that restricted availability of mortgages and economic uncertainty continued to deter many people from moving house, with the exception of wealthy buyers.
However, according to figures from the Land Registry, property prices rose 0.1% between May and June. This is the eighth rise in a row, according to figures from the Land Registry house price index, with prices now returning to levels seen in the summer of 2006.
All regions in England and Wales experienced increases in their average property values over the last 12 months, with London seeing the highest annual price change with an increase of 12.2%.
Such conflicting reports might make you feel confused about the future direction of house prices. But, remember, they are average figures, based on a sample of UK property transactions and do not reflect the upper end of the UK housing market, where prices are continuing to rise due to the scarcity of high quality property.
There is no single ‘UK property market’ but different market segments which are affected by specific factors and behave in different ways. We are beginning to see a polarisation in the market between the upper end, where demand is strong, supply of property is restricted and prices are steadily rising, and the lower end, where confidence and lack of capital are clear constraints. It may be that a two-track market is starting to form and it will continue to do so as long as specialist brokers are able to arrange the funding needed to finance deals at the upper end of the market.
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UK house prices: rising or falling?
According to the Nationwide Building Society, price growth in the housing market finally ground to a halt in July as prices fell 0.5% over the month for the first time in five months. Annual property price growth also fell from 8.7% to 6.6%, largely due to a shortage of buyers.
Martin Gahbauer, Nationwide’s chief economist, said that restricted availability of mortgages and economic uncertainty continued to deter many people from moving house, with the exception of wealthy buyers.
However, according to figures from the Land Registry, property prices rose 0.1% between May and June. This is the eighth rise in a row, according to figures from the Land Registry house price index, with prices now returning to levels seen in the summer of 2006.
All regions in England and Wales experienced increases in their average property values over the last 12 months, with London seeing the highest annual price change with an increase of 12.2%.
Such conflicting reports might make you feel confused about the future direction of house prices. But, remember, they are average figures, based on a sample of UK property transactions and do not reflect the upper end of the UK housing market, where prices are continuing to rise due to the scarcity of high quality property.
There is no single ‘UK property market’ but different market segments which are affected by specific factors and behave in different ways. We are beginning to see a polarisation in the market between the upper end, where demand is strong, supply of property is restricted and prices are steadily rising, and the lower end, where confidence and lack of capital are clear constraints. It may be that a two-track market is starting to form and it will continue to do so as long as specialist brokers are able to arrange the funding needed to finance deals at the upper end of the market.
This entry was posted on Friday, July 30th, 2010 at 4:09 pm and is filed under Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.