Housing prices in the UK fell for a third month in September because of weakening demand that could continue to affect property values.
Prices declined 0.1 percent from the month before and 0.5 percent from one year ago, according to a study by Hometrack Ltd., reports Bloomberg.
The number of new buyers who registered with real-estate agents also fell 3.6 percent, which is the biggest drop in the last eight months. Richard Donnell, Hometrack’s director of research, stated:
“The uncertain economic outlook, together with affordability pressures, will continue to act as a drag on housing-market activity. Pricing will remain under slow downward pressure, but the tightening of supply will limit the scale of price falls in the short term.”
Donnell added that the pressure on house prices could outweigh the effects of the Bank of England’s mortgage lending boost through a new credit-boosting program. The central bank’s policy makers could also commit to completing their plan to raise bond holdings to $605 billion while they assess the impact of their initiatives to aid in economic growth.
The Guardian notes that housing prices in the Greater London area have been getting 94 percent of the asking price, which is one percent more than the national average. When talking about the outlook, Donnell stated:
“Looking ahead to the remainder of the year, levels of market activity are set to remain subdued with house prices continuing to drift slowly lower. However supply will continue to tighten, acting as a support to and limiting the scale of, price falls.”
While housing prices continue to fall in the UK, this outlook provides hope that the market will recover soon.