UK property market still stagnant

The UK’s property market is continuing to “tread water”, after figures from Halifax revealed that house prices dipped by a marginal 0.4% in August.

The drop in the market meant that the average house price fell to £160,256 last month, negating the effects of two previous rises and bringing property values to the same level recorded at the end of 2011.

Halifax housing economist Martin Ellis said that an easing of inflation could boost consumers’ spending power and could prop up house prices in the ensuing months as a result.

However, he said that the outlook for the UK’s property market was still bleak, with house prices expected to remain flat into 2013.

Data from Nationwide painted a more positive picture for property prices in the UK, outlining that the value of homes inched up by 1.3% in August, representing a two-and-a-half year high for property price growth.

However, Robert Gardner, Nationwide’s chief economist, argued that while the upturn may support the idea that the average value of homes in the UK is on the increase, property values are likely to remain stable over the next few years.

“House prices are expected to remain fairly stable over the next two years, while incomes are likely to continue to rise gradually, which will also help to support affordability,” he said.

Barclays analyst Blerina Uruci supports the idea that the UK’s housing market will continue to stagnate for the remainder of the year.

“We expect house prices to be marginally lower in 2012 compared with last year as the weakness in demand is likely to be offset by tight housing supply and support coming from the Funding for Lending Scheme,” he said.

In contrast, Mark Harris, chief executive of mortgage broker SPF Private Clients, argues that the housing market is likely to pick up in the upcoming months:

“September heralds the start of a final push in property sales before the end of the year as many would-be buyers aim to get into their new homes before Christmas. As a result we expect to see a pickup in business in the next couple of months,” he said.

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Posted by: WarrenWilson Categories: Buying, Estate Agents, Finance, Selling Tags: , , 5 Comments

5 Responses to UK property market still stagnant

  1. avatar Astrid Rea says:

    I don’t know why you are all so jubilant about house prices staying high. The fact is that the greed which started some time ago is still persisting and one can purchase a better house abroad for much less money. This is a move we have had to take because English house prices are still too high for most people.

  2. avatar Chris Longley says:

    Sellers and Buyer stand off remains.

  3. avatar Maria Bennett says:

    The stagnant housing market is not being helped by the current Draconian Stamp Duty charges. People are obliged to relocate to find work, only to find themselves being charged tax not only through PAYE but by virtue of purchasing a property. Now that £250,000 is a much closer average to property prices in many areas, many families are being squeezed through much higher mortgages. To expect them to pay £7,500 + just for buying a house is utterly ridiculous. How can this tax be justified? At the very least, it needs a thorough reform to alter the ridiculous jump from 1% at £249,999 to 3% of the entire amount at £250,000. Surely it would be fairer to tax only the excess above £250,000 at 3%, although there’s every justification for raising the 3% threshold to £350,000 or higher. Highly privileged, public school-educated politicians like our current PM are not interested in the struggles of ordinary people to meet the financial pressures of today.

  4. avatar Lee says:

    It seems that no one can decide if the housing market is going to up or down, i guess the only way we are going to find out is to wait and see

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