The South West experienced the greatest monthly rise with a movement of 2.2 per cent. The North East experienced both the greatest annual price fall with a decrease of 8.8 per cent and the most significant monthly price fall with a movement of 2.3 per cent.
The most up-to-date figures available show that during May 2011, the number of completed house sales in England and Wales decreased by 10 per cent to 46,870 from 52,170 in May 2010. The number of properties sold in England and Wales for over £1 million decreased by 44 per cent between May 2010 and May 2011, from 464 to 262.
Nick Leeming, business development director of zoopla.co.uk, said, “Low transaction levels and the year on year decline in average prices is representative of the caution gripping buyers and mortgage lenders alike. Lenders are beginning to offer more tempting mortgage products but the pool of borrowers who qualify for these deals is very shallow. In addition, the cost of day to day living is squeezing peoples’ ability to save for deposits and get onto the housing ladder leaving a vast backlog of first time buyers anchored to the rental market. Until people feel more confident about their personal finances and are able to put aside money to build even the smallest of deposits the market will continue to stutter.”
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains said: “A rise of 1.3% means prices rose £30 per day last month. This would normally indicate a strong market, but it would be jumping the gun to suggest we’ve turned the corner in the UK. Mortgage lending is still subdued and prices have fallen 2.1% in the last 12 months.
“Nevertheless, there are a number of reasons to expect further growth in the coming year. The probable extension of the interest holiday provided by the MPC’s retention of the 0.5% rate means mortgage providers are competing to offer cheaper and cheaper deals. What’s more, transactions in areas which have seen the greatest price falls in England and Wales have been rising throughout the last quarter. This suggests prices in these areas may be somewhere near the bottom and when you consider the low price of mortgages, there are a lot of great deals out there for investors. But while there are tangible reasons to be optimistic, the market won’t return to consistent growth until mortgage lenders feel confident enough to start increasing the amount of money they’re pumping into the market”.
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