UK house prices fall due to buyer shortage

UK house prices fall due to buyer shortage

A shortage of buyers sent British house prices falling in July for the first time since February, figures showed today.

The average price of a UK property dropped 0.5% to £169,347 (€203,000) between June and July, according to Nationwide Building Society.

It said the fall came as househunter numbers dwindled amid uncertainty over jobs and the wider economy as the Government ramped up its austerity drive.

The scrapping of home information packs (Hips) also tempted more sellers on to the market, which has seen supply outstrip demand.

July’s fall comes after growth stalled in June, although prices remain higher on a year-on-year basis.

Nationwide said prices were 6.6% higher on an annual basis in July – lower than the 8.7% in June.

It added that, despite record low interest rates and a stamp duty holiday for most first-time buyers, the number of properties changing hands across the UK is running at half the levels seen prior to the financial crisis.

Martin Gahbauer, Nationwide’s chief economist, said: “A combination of restrictive credit conditions and uncertainty about the future economic outlook continues to limit the pool of buyers to those with relatively large financial resources.

“Many potential buyers still lack the confidence to purchase their first home or trade up when faced with uncertainty over future income and employment prospects.”

He said it would take several months to establish if the market is on a downward trend, or if prices are merely flattening out.

However, a gloomy prediction yesterday from forecasting body the National Institute of Economic and Social Research (NIESR) suggested the market is on a clear path down.

The group warned that house prices would fall by around 8% over the next five years, with inflation taken into account, as the Government’s austerity measures hit confidence.

More on this topic

House prices predicted to rise further, according to Central BankHouse prices predicted to rise further, according to Central Bank

Varadkar allays fears of ‘land bubble’ amid home price riseVaradkar allays fears of ‘land bubble’ amid home price rise

House prices continue to rise with an increase of 12.4% in twelve monthsHouse prices continue to rise with an increase of 12.4% in twelve months

Warning about rate of rising house prices as figures show 13% increaseWarning about rate of rising house prices as figures show 13% increase

More in this Section

Two banks to sell off over 1,000 ATMsTwo banks to sell off over 1,000 ATMs

Housing cure needs careful consideration of all options, not a knee-jerk reactionHousing cure needs careful consideration of all options, not a knee-jerk reaction

Cork Company of the Year Awards: Casting an eye over the Large company finalistsCork Company of the Year Awards: Casting an eye over the Large company finalists

Boom-bust property cycle is a certaintyBoom-bust property cycle is a certainty


Lifestyle

In conversation with Hilary Fennell.This Much I Know: Crime Writer, Patricia Gibney

In the middle of awards season, the Grammy Awards is a chance for musicians to hit up the red carpet and wear their biggest and boldest outfits.Pink was the unexpected colour of choice at the Grammy Awards

Wesley O’ Regan is the General Manager of Popscene in Voodoo Rooms, Cork city. Popscene opened last November and is Cork’s only themed bar that is dedicated to celebrating the best of the 80s and 90s. https://www.facebook.com/PopsceneCork/You've Been Served: Wesley O'Regan, Popscene

More From The Irish Examiner