Year on year house price growth slowed to 7.0%, and is expected to slow further as increases in 2010 fail to match those of a year ago.
David Brown, commercial director of LSL Property Services comments:
“Historically, transactions slow in September but there has been a welcomed increase in activity this year compared to last. The London market has been particularly active, with sustained investment from foreign investors and cash-rich buyers fuelling an increase in transactions.
"Despite the sluggish growth in house prices, there have been some small rises over the last five months but the next few months could see changes. People know that imminent public spending cuts will hit their household finances. Added to that is the problem of mortgage finance, which remains the main hurdle for first-time buyers. And as lenders turn their attention to repaying the £300bn they owe the government in the Special Liquidity Scheme, the market won?t loosen up any time soon. On top of this, the FSA?s proposals in the Mortgage Market Review may well add further constraints to the FTB market. While we won?t see a „double-dip? in the housing market,
Richard Sexton, Business Development Director of e.surv said:
“The market is fragile and with credit conditions worsening this month, it is no surprise that house prices are sluggish. Lenders made mortgages more difficult to secure for those without large cash sums to pay up-front by reducing loan-to-value in September. Everybody is waiting with baited breath to see the effects of further austerity measures in the Government’s spending review, and the effect of further policy measures such as another round of quantitative easing. Things will be a lot clearer in the housing market in a couple of months, but before then we would not expect to see major swings in either direction.”
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