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Thursday, 5 July 2012

UK house prices registers highest annual decline rate

According to the latest reports on house prices for sale in UK, noticed the highest decline in rate of houses in last three years.  The challenging economic time of UK has hit hard on the property prices making it way cheaper in June.

This is the biggest fall registered from August 2009, of 1.5 % year-on-year to £165,738 on average. The situation is not so same for all the cities in UK, however, that said, there is a decline in prices overall by an average of 1%. However, in London, the prices during this time were up by 1%.

The immediate cause for this situation can be attributed to the ending of stamp duty concession for the first time home buyers in UK which ended in March.

Robert Gardner, Nationwide's chief economist, said prices are likely to remain "fairly stable" over the next 12 months amid a lack of homes on the market, continuing a trend seen over the past two years.

"The slightly weaker trend we've observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near-term rebound," he said.

Else than the problem of ending the stamp duty concession, the other reason for increase house prices is the non-availability of the easy/soft mortgage finance. If the lending becomes cheaper by the banks in England, the situation could be come down to normal.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "While the recent lending figures from the Council of Mortgage Lenders were encouraging, here we are back down to earth with a bump. The Olympics and traditional summer lull mean the next few months look set to be even more challenging.

"However, a number of lenders have reduced their fixed rates in the past couple of weeks, reflecting cheaper Swap rates and a desire to transact some decent levels of business ahead of the quieter summer months, so those looking for a mortgage will find some good options at the moment."

While some say that the outlook will better in the second half of 2012, the others say that the economic downturn will not cease and shall aggravate, making it danger that the house prices will fall more.

The ongoing Euro zone crisis have created a situation in which the households who have taken a mortgage loan to buy a house are busy repaying the mortgage, and the new mortgage schemes or lending schemes that are coming are obviously keeping a high rate in order to benefit themselves from the ongoing financial crunch.

All in all, this is indeed a grim situation, the government really needs to do something concrete in terms of banking schemes that shall benefit the housing and property market in UK.


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