House prices 'cool' with a drop of 0.2%
House prices have fallen for the first time in 17 months, new figures from Nationwide have revealed, with some housing market commentators claiming it is evidence the market is "cooling".
The average price of a home in the UK fell by 0.2% in September according to the lender's latest data, with the average property price now standing at £188,374 - down from £189,306 in August.
The fall puts an end to 16 months of consecutive growth in the housing market, with the building society expecting the market to slow even further over the next three months, with demand beginning to moderate.
However, Nationwide also highlighted the huge regional differences in prices, with prices in London now at a record high of £401,072 - 31% higher than their 2007 peak, while prices in the UK as a whole are around 2% higher than in 2007.
St Albans saw the biggest rise, with prices up 24% compared to a year ago, with the average property price standing at £479,497, followed by Cambridge (up 21% in the last year, to £423,904), Belfast (up 21% to £188,240) and Reading (up 18%, £310,705).
Newcastle saw the smallest growth of just 4% in the last year, meaning the average house price there is £182,506.
Robert Gardner, Nationwide's chief economist, said: "Price growth may soften further in the final quarter of the year. However, the outlook remains uncertain. There have been tentative signs from surveyors and estate agents that buyer demand may be starting to moderate, but the low level of interest rates and strong labour market suggest that underlying demand is likely to remain robust."
Alex Gosling, managing director of online estate agent Housesimple.co.uk, added: "It's official - the market is cooling. September is typically a busier month for buyer activity than August and yet prices have fallen. But there's no need to press the panic button just yet."
David Newnes, director of Reeds Rains and Your Move estate agents, said lending to first-time buyers and the Help To Buy scheme remain "vital tools to keep first-time buyers active in areas of the country where the recovery is vulnerable".
First-time buyers could also be boosted by recent news from the Conservative Party Conference, when Prime Minister David Cameron said that first-time buyers will be able to buy a new-build home for 20% less than the market price if the Tories win the General Election in May. He said 100,000 new homes will be built on brownfield land in England and they will be made available at the discounted rate to first timers under the age of 40.
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.