Economists at lending house Halifax say that average home prices in the United Kingdom (UK) haven’t changed over the past year, but a string of slips over the past three months have impinged upon gains made earlier in 2012. The last three months ending in September showed prices 0.5% lower than the preceding three months and that overall property prices are 1.2% below last year’s prices. Transactions in the UK have remained stable and mortgage payments have stayed below the long-term average for disposable income for all buyers. For more on this continue reading the following article from Property Wire.
House prices in the three months to September were 0.5% lower than in the preceding three months. This compared with a 0.3% decline in August.
UK home prices fell by 0.4% in September and were 0.5% lower in the preceding three months, according to the latest index from lender the Halifax.
It was the third consecutive monthly fall and has more than offset the two successive rises in May and June bringing the average property price to £159,486.
The lender said that overall prices have been stable in 2012 and are 1.2% below where they were a year ago. Prices fell very slightly over the first nine months of 2012. The average UK house price in September 2012 was 0.3% lower than in December 2011.
Prices in the three months to September were 1.2% lower than in the same period a year earlier. This measure of the annual rate has moved outside the narrow range of 0% to -1% for the first time in seven months.
‘Overall, there has been very little change in the average UK house price so far this year. There is, nonetheless, evidence of a slight deterioration in the trend recently with prices in the three months to September 0.5% lower than in the previous quarter,’ said Halifax housing economist Martin Ellis.
‘The generally weak economic climate remains a significant constraint on housing demand. The relatively low level of mortgage payments in relation to income, however, continues to provide support for house prices. We expect house prices to be broadly unchanged over the rest of this year and into 2013,’ he added.
Activity remains subdued but stable. Home sales have been very stable in recent months, at between 75,000 and 77,000 per month between May and August. Overall, sales in the three months to August were 3% higher than in the same period last year according to data from HMRC.
Ellis said that the relatively low level of mortgage payments in relation to income continues to provide support for house prices. Mortgage payments for a new borrower remain significantly below the long term average as a proportion of disposable earnings.
Typical mortgage payments for a new borrower, both first time buyers and home movers, at the long term average loan to value ratio, have nearly halved as a proportion of disposable earnings from a peak of 48% in the third quarter of 2007 to 26% in the third quarter of 2012. This is significantly below the average of 36% recorded over the past 27 years.
This article was republished with permission from Property Wire.