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For the second consecutive month in a row, house prices have fallen, according to the latest Nationwide report.
House prices fell by 0.9 percent in August and this three month rate of change shows that the summer months experienced price stagnation, although the percentage of borrowers on variable rates was shown to have increased.
The average house price in August was £166.507 with an annual change of 3.9 percent, compared to £169.347 and 6.6 percent respectively in July.
“As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices,” commented Martin Gahbauer, Nationwide’s chief economist.
“Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development.”
In the first seven months of 2010, almost 340,000 mortgages were approved which is 30,000 higher than the same period in 2009, however these are well below levels prior to the recession, Bank of England mortgage approvals data recently highlighted.
“A lack of mortgage finance remains a key problem for many borrowers looking to take their first step on the property ladder, with the high deposits required still proving to be an obstacle for many,” Simon Rubinsohn, RICS chief economist, commented on the data.
“Uncertainty over the overlook for the market may also be discouraging would be buyers.”
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