Nationwide: House prices down 0.6% in August

| September 1, 2011 | 1 Comment

The latest house price index from the Nationwide Building Society has revealed prices fell by 0.6% in August on a monthly basis – the fastest pace since October 2010.

On an annual basis, house prices are now 0.4% lower than this time last year with the average UK home costing £165,914.

The latest figures suggest the housing market will remain subdued as a lack of buyers, together with the ongoing lack of mortgage availability, means demand for housing is weak.

The Nationwide’s chief economist, Robert Gardner, comments: “For some time now the residential property market has been moving sideways, as weak demand for homes co-existed with a situation where relatively few homes were coming on to the market.”

Mr Gardner points out that if employment falls further, the demand-supply balance will put further downward pressure on prices.

The Halifax will publish its August house price index next week.

In other news this week, the Bank of England revealed mortgage approvals picked up significantly in July to a 14-month high.

According to the central Bank, there were 49,239 loans approved in the month – higher than the upwardly revised 48,500 for June and a significant improvement on April’s 45,855 which represented a four-month low.

However, approvals remain well below levels seen prior to the financial crisis.

Since the early 1990s, mortgage approvals have averaged around 90,000 a month but the credit crunch saw a tightening of lending criteria and many have been unable to secure a mortgage unless they have a significant deposit.

This has particularly had a negative impact on the housing market as first-time buyers have been unable to get a foot on the property ladder.

First-time buyers are a key part to the recovery of the housing market and until mortgage availability improves for this group of people, activity is expected to remain subdued.

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  1. Julian Cassell says:

    I’m not sure that these tiny percentage hikes in house prices indicates anything substantial. Area is also vital. The best indication is often keeping an eye on price movements in local estate agents.

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