by Mark Johnston
According to a report from Nationwide, house prices started the New Year with a slight decline falling by 0.2% in January. The annual rate of house price growth slowed to 0.6% from 1% in December.
The report warned that house prices dropped more than £51 a day in January 2012 and further falls are on the way.
Robert Gardner, Nationwide’s chief economist, said “the economy is not expected to gather much momentum until the second half of 2012 at the earliest, which suggests that labour market conditions and buyer sentiment may be slow to improve”.
Capital Economics added “given that the economy is already contracting, unemployment is rising and consumer confidence remains low, it would be no surprise to see more widespread and consistent house price falls this year”.
It seems that consumers are wary and therefore they are not purchasing anything that may be a potential risk.
Miles Shipside, director of Rightmove, suggested “in areas where there is a lot of property up for sale, buyers are looking hard for properties that tempt them with something really special in terms of value, potential, location or quality finish. If it does not shout ‘special’ then they are unlikely to overpay for the privilege of buying an average property in these mortgage constrained times”.
House sales fell by 11% during 2011, with only 890,000 completions, one of the lowest totals recorded.
The number of new homes for sale has slumped to its lowest point in more than a decade, figures have revealed.
Fears have been raised by estate agents that current low transaction levels will be affected further when the stamp duty holiday for first time buyers ends in March this year.
According to property website Rightmove, since the turn of the year just 34,433 properties have come on t the market, which equates to around half of the pre-credit crunch levels.
Sellers are reluctant to put their homes on to the market with an average of less than one new listing per branch per week.
Property websites have commented that due to the low number of new homes being listed potential buyers now appear to have become online junkies, ready to pounce on fresh property coming on to the market.
The market is stuck in a low transaction volume pit that will be hard to escape from with out the mortgage funding to satisfy what appears to be a strong pent up demand.
Housing demand has been dampened by the difficulties that buyers have faced in getting mortgages. However, the latest figures from financial information service Moneyfacts show that mortgage availability has risen for those unable to raise a large deposit.
At the start of February 2012, there were 343 mortgage products available at a 90% loan to value (LTV), which is up from 280 recorded in January.
There are also a raft of eye catching mortgage deals for buyers with larger deposits and this it seems is due to the Bank of England keeping interest rates at a record low level.
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