According to the latest LSL House Price Index eight of the ten regions within in England and Wales have falling house prices, based on the average annual change over the last three months. Despite the falling prices average figures are currently above zero, mainly due to the continued price rises in Greater London and the South East.
The HPI shows a house price rise of just £20.00 in May which does indicate that property is becoming more affordable and the market becoming more stable. Unfortunately, due to a lack of buyer confidence and strict lending criteria the housing market is still being held back.
David Brown, Commercial Director of LSL Property Services, commented:
“While house prices remain essentially static, property is actually becoming much more affordable. In the last year, home values have risen by an average of £220 per month, but to keep pace with inflation, they would have had to rise by £830 per month. By the same token, in the four years since April 2007, house prices have risen less than 1%, while average wages have increased by 13.7%”.
Despite a reported increase in affordability many potential buyers will be unable to purchase a property due to tight lending criteria but the biggest issue for buyers is funding the large deposit required. With the Bank of England interest rate remaining at its record low lenders may need to relax their requirements a little in order that first time buyers can take advantage of this new found affordability.
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