Date: Thursday 28 Jun 2012
UK house prices fell by 0.6% month in month in June, £165,738, according to mortgage lender Nationwide, so that prices are now 1.5% below where they were a year ago and at their lowest level since August 2009.
According to Robert Gardner, Nationwide´s chief economist, “the slightly weaker trend we’ve observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near term rebound.”
In part, the ending of the stamp duty holiday in March may also be a factor, he added. Even so, he expects the negative impact will be short-lived and that much of the recent softness in housing market activity will subside in the months ahead.
Likewise, he also believes that policymakers’ efforts to bolster the supply and lower the cost of credit should provide support to demand. Moreover, the supply side of the market is still constrained, with construction failing to keep pace with the number of new households being formed.
When combined, he explains, those trends suggest a continuation of the pattern experienced over the past two years, with prices remaining fairly stable over the next twelve months.
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