Two reports have been released this week which suggest that there is currently very little fluctuation in the price of homes. They also suggest that the average house prices have been holding steady for most of the year so far.
Some figures from the Land Registry have indicated that when compared to August 2010, average house prices are now 2.6% lower. In August this year, they had fallen again for the fourth month in a row, 0.3% down from July, to an average price of £162,347.
A similar report from the Nationwide Building Society suggested that house prices rose by 0.1% in September this year and that the average cost of a house was only 0.3% lower than last year.
Some experts have pointed out that the average house cost tends to fluctuate every month of the year. However, over the past year, these fluctuations have been small.
The information that was released by Nationwide appears to reflect similar information from the Halifax. Housing prices appeared to bottom out in March 2009 and April 2009. There was a steady recovery up to April 2010, after which they started to fall again. However, since December 2010, the prices have not changed significantly.
The Nationwide report suggests that the eurozone debt crisis has had a continued impact on buyer confidence. Robert Gardiner from Nationwide said: “Sentiment towards major purchases is depressed, as a result of weak labour market conditions and ongoing pressure on household budgets from above-target inflation.”
Nationwide went on to predict that the over the next few months, house prices will continue to hold steady. They have suggested that the global economic situation continues to look poor, more people are finding it difficult to find work and a gradual rise in available properties will all contribute to prevent house prices from rising.
Another report from the Bank of England points to the difficulties that mortgage lenders face in raising funds from the financial market in order to then lend money to customers, as having an impact on the costs of housing. They suggest that mortgage lending has been rationed since 2008, making it difficult for many people to purchase properties.
Although the average price of housing has remained steady for the whole of the UK, there are bigger fluctuations across the regions. London continues to see an increase in the cost of housing, whilst Wales and the North East continues to see falls.
House prices in London are now 2.1% higher than they were last year. The unique London housing market has a wide appeal, particularly to foreign investors who are attracted by the currently cheap pound. This, combined with a shortage of property in the capital has seen the price of housing continue to steadily rise.
By comparison, the North East of England has seen the average cost of houses fall by 7.8% over the last year and house prices in Wales has fallen by 5.5%.