Although the Nationwide has cited a slight house price rise for July (0.2%), overall property market transaction levels remain low. House prices are up by 4.7% since the start of the year, say the building society, with the average house price now standing at £168,731. This averaged figure is up by more than £7,000 on January but it’s 0.4% lower than this time last year.
However, despite the slight rise in prices, the Bank of England is telling a tale of low market activity. Just 204,000 property transactions were recorded in the three months up to June – a time of year which traditionally sees strong house-buying levels. The month of June did see a pick-up in the amount of mortgage activity though, with the Bank reporting a 13-month high of 48,421 mortgage approvals, but this is only just over half of the long-term monthly average of 90,000.
The current property market ‘big picture’ seems to be one of buyers and sellers playing a waiting game. Estate agents have reported a stand-off between vendors and potential customers with the former reluctant to cut prices and the latter unwilling to pay what they see as, over the odds.
Consequently unsold property on estate agent’s books is standing at a two-year high.The situation is much more complicated than a mere stand-off though; a lack of mortgage finance available with the best deals only being available to those with large deposits is thwarting many potential buyers and some sellers are reluctant to put their home on a market that is facing downward pressure on prices.Nationwide’s house price data, based on its own lending figures, has been amongst the most optimistic in 2011, with property value rising modestly, or remaining unchanged for six out of the seven months so far.
The explanation for this, from Nationwide chief economist Robert Gardner, is that “sluggish demand for homes, combined with only a relative gradual rise in the supply of available properties, has helped to keep property prices relatively stable.”Particularly affected by the sluggish market is the first-time buyer. This is leading to a trend, particularly amongst the younger generation, to a nation of home renters, rather than home buyers. The percentage of homeowners has dropped by 3.5% in 6 years and, according to a Genesis Housing Association report, that figure could fall by a further 7.5% in the next 15 years.