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House across the UK on average fell by 0.9% last month according to latest figures. This followed on from a drop of 2.5% in May. The average price for a house now stands at £172,415 which is £13,629 cheaper than in October.
The credit crunch is affecting the number of people available to buy which is driving down demeaned, bring prices down with it. Mortgage deal approval fell in May to 42,000, a 28% fall compared to April and 64% down on the same time last year. Not only are people being turned down for mortgages when only last year they would have been accepted but the attractiveness of the deals on offer are putting people off. Gone are many of the 100% mortgages and gone are the good interest rates. This seems to putting off people who already own property more so than first time buyers.
The rate of first time buyers purchasing property remains steady but the number of movers, who already own their own homes, is falling. Put off by the unattractive mortgage offers and the fall in prices many are prepared to stay put and wait. Those who do not need to move are staying put until the housing property recovers and range of mortgages available become more enticing. This however is not likely to happen in the near future.
Housing experts are divided on just how long this downturn in the marker is likely to last. Many are predicting that prices will continue to fall throughout the year and on into 2009 and even beyond that. There are those that have predicated prices could fall by 35%, or further, before things begin to settle down, though even then some are predicting that prices will not go up straight away. Banks and mortgages are unlikely to return to lending money out as freely as they had been doing. It is still likely to be difficult to obtain a mortgage at favorable rates. However on the plus side many have predicted that the fall will not be as bad. Some have been pointing to the fact that the rate of house prices falling is actually slowing compared to 3 months ago. With the same principals that affected the rise in house prices in the first place, that of demand outstripping supply, its inevitable that house prices will again rise.
Others have stated that a fall in the prices is exactly what the property market need. Prices have risen 10, 20 or even 30% year on year well above increase in earnings. This has created a state where unless you already owned your own property you would have to be mortgage to the hilt in order to buy. So this down turn is just a correction to help bring house prices in line with earnings.
If you would like more information on a cash for property deals please contact Friendly Home Buyer who offer a fast and professional service to anyone wishing to sell their property quickly and discreetly.
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