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Slight Dip in House Prices in August

 

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The price of the average house price in England and Wales fell by 0.6% last month, according to Nationwide’s latest data.  The average house now costs £165, 914, which is 0.4% lower than one year ago.  The building society also says that it expects property value to continue to get lower as the remainder of the year progresses.

 

Nationwide’s Chief Economist summed up the findings thus: “For some time now the residential property market has been moving sideways, as weak demand for homes co-existed with a situation where relatively few homes were coming onto the market.  A further fall in employment would be likely to upset the relatively delicate demand-supply balance and put downward pressure on prices.”

 

The Nationwide data is based on a sample of the lender’s own loans extended during the month and other surveys (such as that of the Land Registry) suggest that the price of houses has fallen more.  The building society report also stated that interest rates are expected to remain on hold until well into 2012 to provide support for homeowners and domestic spending.

 

Call for Action from NHF

 

Meanwhile the National Housing Federation (NHF), a body representing housing associations in England, has warned the Government that the housing market will be plunged into “crisis” without action to address the “chronic under-supply of homes”.  Its plea comes as further falls in home ownership rates and higher rental prices are predicted.

 

Although the Government has stated that it has made more land available for building and is investing £4.5bn in lower-cost homes, the NHF says that this represents a 63% cut on the previous programme of Government spending in this area.  NHF campaigns director, Ruth Davison said: “What we need to do is build new homes; Governments of all colour have not properly understood that we are in the grip of a housing crisis, and unless they do something about it, an entire generation will be locked out of decent housing.”

 

The body have also indicated that, realistically, people can only get mortgages for 75% of the price of a home – forcing many would-be buyers onto an increasingly expensive rental market.  Research by Oxford Economics, commissioned by the NHF, suggested that home ownership levels would fall from 67% to 63.8% over the next decade.