According to Halifax data, house prices have fallen for three consecutive months. The 0.6% fall in June comes after 0.5% and 0.1% declines in May and April respectively. House prices are up 7.5% since the market’s recent low of spring 2009, but the average house is worth £3,200 less than in January of this year, according to the building society’s figures. The general consensus among estate agents indicates that the reason for the recent drops in the market, are down to more houses coming onto the market, tipping the balance between supply and demand.
Halifax’s housing economist, Martin Ellis agrees with this theory: “A shortage of properties for sale in 2009 contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months has helped to reduce the imbalance, relieving the upward pressure on prices. The low level of interest rates, however, continues to support housing demand.”
One of the other big mortgage lenders in the country, don’t agree with the Halifax. Its house price indices showed that property value actually inched up by 0.1% in the month of June with the average house being worth £170,111 (£166,203, according to Halifax). It also said that the annual inflation figure currently stood at 8.7%, which is rather healthier than the 6.3% figure quoted by its rival. However, the two do agree on the opinion that house sales will be subdued for the rest of the year, with prices staying constant or even falling slightly.
More evidence of supply starting to outstrip demand comes from property website, findaproperty.com. It says that there are 23% more properties for sale on their site than one year ago. The evidence is stacking up that we are now experiencing a buyer’s market where the vendor will have to price accordingly to tweak the buyer’s interest. The recent suspension of HIPs can only have added to the current market status.