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House Prices Forecast to Remain Static As Values Decline at Fastest Rate for Nearly 3 Years
According to the Nationwide the UK property market will continue to stagnate, and it is warning that at the very best house prices will remain static for the rest of the year. Property prices fell by 0.6% in June, and have fallen by 1.5% over the last year. Although this is a relatively modest drop, it is the largest annual decline since August 2009. The Nationwide has pointed out this is hardly surprising given the fact that the UK economy fell back into recession at the beginning of the year, and it expects economic conditions to remain tough for at least the next 12 months. However there are signs that substantial efforts are being made to boost the supply of credit to the economy in order to help lower the cost of borrowing, and this could help to bolster the property market.
At the moment the average house price is £165,738, according to the Nationwide index, which is £2,500 less than a year ago but is still more than the £163,822 recorded in December last year. The ending of the stamp duty holiday in March lifted the number of property transactions, but the Nationwide feels it's debatable whether or not it boosted the number of overall property purchases. They have estimated that more than 200,000 first-time buyers benefited from the stamp duty holiday over the last couple of years, saving around £1,800 each. Estate agents have pointed out that property prices are being held up simply due to the lack of available homes, as many would-be sellers are choosing to wait and see what happens next rather than reduce the price of their property.