The Inside Edge
Mortgage lender Halifax have reported that the property market continues to lack any direction following a second successive month of lower prices today.
Last month’s decline of 0.5% followed a fall of 1.1% in August, although Halifax said average prices in the quarter to September were still 0.1% higher than the previous three months – the first such rise since early 2010.
Halifax housing economist Martin Ellis said September’s drop continued the mixed monthly picture so far this year with four rises, four falls and one month of no change in prices.
He added: “This mixed pattern is consistent with a market where prices are lacking genuine direction.”
The average UK house price in September was 1% lower than in December 2010 on a seasonally adjusted basis, at £161,132.
Mr Ellis said the financial uncertainty was likely to be constraining demand but added that low interest rates and a rise in employment over the last year have been supporting the market.
“We expect little change over the remainder of this year,” he added.
Typical mortgage payments for a new borrower have fallen from a peak of 48% of average disposable earnings in mid 2007 to 26% in the most recent quarter. This is well below the average of 37% over the past 25 years and the lowest since 1997, the lender added.
This week, price comparison website Money Supermarket said the average fixed two-year mortgage deal of 3.82% was the lowest since it began compiling records in 2007, down from 4.01% in August.
The latest drive downwards saw Leeds Building Society launch its lowest ever two-year fixed-rate mortgage with a rate of 1.99%.