HOUSE PRICES slipped in September, according to Nationwide’s house price index, released yesterday, adding weight to other studies showing downturn during last month.
The average house price fell 0.4 per cent over the month, after the 1.1 per cent gain seen in August, and contributing to the overall 1.4 per cent fall seen over 12 months.
But Nationwide chief economist Robert Gardner said that the Bank of England’s Funding for Lending scheme (FLS) could arrest the market’s decline.
“Policy measures such as...FLS should provide support for activity in the housing market by ensuring the availability of credit and lowering its cost,” Gardner predicted.
But even this boost, and a return to growth, could not stop house prices from staying flat over the next year, Gardner forecasted.
This data came in tandem with new August data on first-time buyer transactions, released by LSL Property Services.
Transactions involving first-time buyers slumped 3.7 per cent in August, flat compared to a year earlier, the data showed.
Though this dip would indicate market tightening, the average loan to value ratio actually increased, from 78.9 per cent in July to 81.5 per cent in August.
“There are encouraging signs that lenders are relaxing deposit requirements,” said LSL boss David Newnes. “But [relaxed deposit requirements are] not translating into increasing first time buyer purchases.”
“Lenders are cherry-picking those new buyers with the very cleanest credit histories and largest incomes,” Newnes explained.