According to new research, property prices have fallen again in August by an average of 0.9%. The drop is a blow to home owners who were expecting to see a rise in August.
“With lending still at very low levels in the U.K, the price of property has to drop to allow people to buy. This drop in August is no surprise to most people in the know” said our adviser spokesman Richard Pradon. He went on to say that they had seen a marked increase in remortgage levels in August as people tried to get off their banks SVR. The lack of equity though, due to the house price decline, made a majority of these remortgages not possible though.
The drop comes off the back of a 0.5% drop in July and means now that the average price of a U.K property is £166,507. Economists fear that the price of housing may well drop a further 3% by the end of the year. This is effectively redressing the balance for when property was overpriced according to inflation in the past.
Finance news believes that there will be a need for increased lending to fuel the property market again. Banks will have to show more generosity on their currently stringent credit rating requirements. At the moment, any missed payments are a death nail to any first time buyers which is halting the property market growth.