House Price Falls Fail to Stimulate Demand

House prices fell for the 9th month in a row, with prices 7.3% off their peak. According to Nationwide Building society average house prices are now £172,415.

The main cause of falling prices is the slump in mortgage availability, mentioned recently.

Despite the falling house prices, there has been little increase in affordability. First time buyers are still struggling to get a mortgage and save a sufficient deposit. Fixed rate mortgages continue to become more expensive.

Home builders such as Taylor Wimpey have axed 900 jobs as the slump in the construction industry continues. The number of new builds has fallen by 27% to 147,000 the lowest levels since 1945.

Government and Affordable Housing.

The government has  pledged to increase the stock of public housing. It’s definition of affordable housing is something less than £150,000. With falling prices, there is an increased choice for the government. However, the number of affordable houses being bought by the government is still low. The government has pledged only £200 million to the affordable housing project, enough for only 1,400 houses.