Assetz For Investors News
Thu, 29 May 2008 12:56:15 BST
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Stuart Law, Chief Executive of Assetz, responds to the latest Nationwide Monthly House Price Index, which has reported a 2.5% fall in house prices for May
“This latest index goes against what was reported by Rightmove earlier this month, which announced a 1.2% increase in asking prices for May. While Nationwide is reporting an acceleration in house price falls, an overview of the data supplied by the five main house prices indices provides a different picture – with monthly house price growth stabilising at the –0.6% mark last month.
“It is also very important to remember that the Nationwide Index is based solely on its own mortgage approval data. Considering it has recently raised its mortgage rates significantly, in the short term, it is hardly surprising it has had this effect as purchasers look to offset increased borrowing costs with further price reductions.
“What we are witnessing is a necessary stabilisation period and not a market crash - considering the house price highs of the last few years, this recent stabilisation is a necessary correction, with typical annual rises of 10% or more not sustainable over the long term.”
Law adds:
“There is currently a great deal of pent up demand from buyers who are eager to buy but cannot secure the necessary finances. As a result, as soon as the mortgage market improves, we are likely to experience a surge of activity as buyers flood the market and prices return to a steady upward trend in 2009.”
