The Inside Edge
After the predictions for 2012’s property market begin to disappear, they are replaced by tangible figures and the Nationwide have indicated a minor drop in housing prices for January, in comparison with the previous month.
The figures reveal that the value of an average home in the UK was £162,228 for January and this represented a fall of just 0.2%. The Nationwide also claim that the rate of property price growth also slowed to 0.6% as opposed to 1% in December 2011.
Nationwide are the first organisation to declare figures of this kind and they are in keeping with the forecasts of many property experts. The organisation themselves had predicted a small decrease or a sideways movement and they appear to have been vindicated by the announcement.
“Given the challenging conditions prevailing in late 2011, with the UK economy contracting in the final three months of the year, it is not surprising that house price growth softened at the start of 2012,” said Robert Gardner, Chief Economist at the Nationwide.
Mr Gardner went on to predict a similar scenario for the first six months of 2012 at least,
“The economy is not expected to gather much momentum until the second half of 2012 at the earliest, which suggests that labour market conditions and buyer sentiment may be slow to improve,” he added.
The Nationwide also pointed to two elements that stand to have a major influence on the figures released for February and beyond. Mr Gardner claimed that the flow of properties emerging on the UK housing market had slowed almost to a standstill and that has helped to keep prices fairly stable.
The other factor surrounds the commonly cited subject of the availability of mortgages and in this regard, a further set of statistics claims that more help to first time buyers with low deposits is becoming available.
The financial information website Moneyfacts shows an increase in products designed for those with a deposit of around 10%. The statistics released at the start of this month show that there are 49 mortgage products for those looking to fund 95% of a purchase compared with just 24 at this stage last year.
In addition, borrowers requiring a 90% mortgage can now find 343 relevant products which represents a significant increase from 280 at the beginning of January 2012.
Much of these figures have been met with a firm degree of expectation but perhaps the most important development is the increase of those low deposit mortgage products. Their potential effect on the property market will be monitored with great interest in the coming months.