A report from the Nationwide Building Society makes for good reading for potential house-buyers, but could be unsettling for sellers.
Findings from the report show that house prices in the UK fell by 0.7% in July, with the average price of a property standing at £164,389. This is a decrease in decline rate in comparison to July 2011, where house prices dropped by 1.5%. Worryingly, this indicates the housing market is the weakest it has been since August 2009.
The housing market is intrinsically linked to employment. As such, a new scheme has been announced where businesses can obtain cheaper loans, giving them more money for new employees. It is hoped that the knock-on effect of this is that more people will be able to afford homes.
In addition, mortgage providers will be able to offer cut-price rates, which again will assist the housing market.
Despite this, chief lenders economist Robert Gardener has urged caution in the coming months. Gardener said: “With the Eurozone situation deteriorating again in recent weeks and few signs of recovery in domestic demand, we continue to expect only a modest recovery in the quarters ahead, both for the UK economy and the housing market.”
Despite economic output being 4.5 percentage points lower than in 2008, there have been 250,000 new jobs created this year to date. This is believed to have led to just a slight drop in property prices in comparison to countries such as the USA, where the market is over-valued.