House prices fell by 1% in June: index
Figures from Britain’s largest mutual society, and one of the biggest lenders by volume in the UK, revealed that at the end of June house prices had on average fallen 1 per cent.
While London showed strong growth counter to the trend, regions such as Northern Ireland saw huge falls in the value of properties.
Robert Gardiner, chief economist for Nationwide, said: “The north-south divide among the English regions continued in Q2, with house price growth in southern England exceeding that of northern England for the 30th consecutive quarter.”
The northwest was the worst-performing English region with prices down 4.1 per cent year-on-year. Wales and Scotland were also down, while Northern Ireland continued to see price falls with average prices down 10.6 per cent year-on-year.
Data from LSL Property Services backed up the Nationwide figures, showing showing a huge fall for Wales.
It recorded an average drop of 17.5 per cent month-on-month, representing £400 on average for each house.
David Newnes, director of LSL, said there was hope after a surge of 28 per cent in the number of first-time buyers in May, which he said was the first increase since the stamp duty holiday in March.
According to LSL’s figures, the average house price for a first-time buyer rose 4.3 per cent while loan-to-value fell 1.6 per cent.
Mr Newnes said: “The market is now being driven by buyers with enough money to absorb the additional tax burden.
“Tracker-rate deals are offering low-cost access to finance. When making loans to buyers with large deposits, lenders have shown they are happy to let borrowers take advantage.”
Mark Ireland, IFA for Hertfordshire-based Richmond House Financial, said: “Activity in the housing market has always been driven by confidence, opportunity and desire. Nationally we’re still seeing fallout from the stamp duty holiday which closed in March, plus a general lack of consumer confidence which is taking its toll on new borrowing figures – key factors in the national position. So with national confidence down and opportunity gone, we are left only with desire.
“From what I see of my London-based clients there is still a strong wish to own property in the capital, both as owner-occupiers and as investors. Medium term I see no end in sight to the gradual rise in London prices and the trend bucking statistics. However I’m always mindful that property bears have been suggesting for some time we are at an edge of a cliff face, over which property prices will drop by around 15 per cent. On a UK-wide basis I tend to agree.”