The property market is not looking healthy as house prices have fallen for the third month running and mortgage lending fell to a ten month low in August.
The latest figures from Rightmove show that property prices have fallen for the third successive month with the average cost of a home now standing at £229,767, 1.1% lower than the previous month.
With more sellers in the market, vendors are having to drop their asking prices, which have fallen by 3.4% (more than £8000) during the last three months. This has wiped out half of the gains made during the year so far.
Annual house price inflation has now eased back to 2.6% as the number of buyers able to proceed with house purchases has also fallen, Rightmove said.
Estate agents are now holding levels of unsold housing stock not seen since 1979.
This gloomy news is not made better by figures from the Council for Mortgage Lenders (CML) who are reporting that gross mortgage lending fell 14% in August, compared to July, the lowest levels for August since the turn of this century.
“We face the prospect of a difficult second half of the year.”, commented Bob Pannell, CML Chief Economist.
“However, the Bank of England is likely to keep interest rates at record lows for longer to support the economy. This will continue to alleviate payment pressures for many borrowers.”, he continued.
This double whammy for the property market goes some way to supporting the view that the UK still teeters on the brink of a double dip recession, both for the economy as a whole and for the housing market.