House prices in the UK dropped marginally in August compared to July, according to the latest figures released by Nationwide. The company's index of home values in the country registered a 0.6 per cent fall last month, bringing the average residential property price to GBP 165,914. Chief economist at Nationwide Robert Gardner described the market as painting "a picture of relative stability", noting that values are just 0.4 per cent below those recorded in August 2010.
"Sluggish demand for homes, combined with only a gradual rise in the supply of available properties, has helped to keep prices stable since last summer," he explained. Mr Gardner also predicted that a similar pattern will be seen in the real estate sector until the end of the year. However, he warned that there are risks to the housing market, most notably from the possibility of rising unemployment should the economy fail to recover.
A report published by Hometrack at the end of August recorded a 1.2 per cent fall in demand for residential real estate last month, attributing this in part to "seasonal factors". But the organisation cautioned that demand is likely to fall further, putting downward pressure on house prices over the course of the next few months. Uncertainty over the economy, a lack of consumer confidence and the squeezing of household budgets are all factors that will contribute to this, Hometrack stated.
- Monday 05 September 2011