Data from three different sources show that the property market is still in decline. The Land Registry, HM Revenue and Customs and the Nationwide have all added to an already gloomy outlook created by mortgage rationing and economic uncertainty.
In its house price index for October, the Land Registry cited the average house price at £165,505 – down by 0.8% from its September figure. This was the second month in a row that the agency had shown a dip in property value. Although prices in London and the East of England had actually gone up, these were diluted by larger falls elsewhere, such as a drop of 1.8% in Yorkshire and Humberside.
According to HM Revenue and Customs property sales were 11% down in October from one year before. Just 79,000 residential properties were sold in the month and, although this figure was 1,000 more than September, it was 10,000 lower than October 2009.
Negative news also came from one of the country’s biggest mortgage lenders – the Nationwide.
It showed a fall in house prices of 0.3% in November and suggested that house prices would continue to fall for the foreseeable future. Nationwide’s chief executive, Graham Beale, said that market conditions had “weakened noticeably” over the last six months due to a decline in buyer demand.
Not that the uncertain financial times seem to have had a negative effect on the building society; it has seen its half year profits rise by 81% to £259m. Only 0.67% of Nationwide mortgages are in arrears by three months or more, which is well below the industry average of 2.15%.
In its report, the building society did offer some positive views for homeowners by stating that the decline in house prices was not expected to be as marked as that experienced in 2008 and that it expected the Bank of England to keep the base rate of interest at, or near its current record low figure (“in order to offset the dampening impact of spending cuts”) until at least late 2011.