Fall in home loans and house prices casts aside housing slump fears

A decline in housing prices and home loans has improved the outlook of the housing market and fears of a new housing slump, according to new figures.

The figures from Nationwide show a reduction of 0.5% in the prices of houses in the UK during July, after the preceding months saw a slow decline in home prices, before remaining stable in June.

The average house price is only 6.6% higher than one year ago, a decline from 8.7% in June, and costs an average of £169,347 according to Nationwide’s figures.

Nationwide’s research is supported by other figures from within the housing industry including the first successive fall month-by-month according to Halifax’s Price Index, while the Royal Institution of Chartered Surveyors has reported the lowest buyer demand for homes in two years.

The slowdown in mortgage lending and the prices of homes has been attributed to reduced consumer demand for homes, as well as an increased supply in homes up for sale.

Figures from the Bank of England also showed that the number of mortgage approvals had fallen in June and that lending overall had also dropped.

Remortgaging figures have also remained low with Paul Samter, of the Council of Mortgage Lenders, saying: “Remortgaging activity also remains at exceptionally subdued levels. The low demand is being driven both by the lack of demand among those existing borrowers enjoying low rates, and tighter criteria that may be constraining those borrowers who do wish to remortgage.”

The Chief Economist at Nationwide, Martin Gahbauer, said: “Despite the introduction of a second stamp duty holiday for the vast majority of first-time buyers and record low interest rates, the number of properties changing hands across the UK is still running at only half the levels seen prior to the financial crisis and recession,”

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Tags: Fears, Home Loans, Housing Slump   Posted in Debt Consolidation