Figures released today by Nationwide, show that houses prices in the UK rose by just 0.1% in June. Prices were up 0.5% in May and 1% in March and April, so there would appear to be a downward trend in the market.
Nationwide sees housing demand as largely stable, but price rises have slowed because of more properties coming onto the market. It is expected that price inflation will fall over the coming months, a reflection of strong increases last summer.
Over the past 3 months, prices in Northern Ireland have fallen 5.7%. The South West saw the largest rises at 3%, with the North West rising 2.6% and London 2.5%.
Figures released from Nationwide today show that house prices are just 9.5% short of their 2007 peak. Prices have climbed by 12.2% since February last year, despite the recession, driven by record low levels of interest and a shortage of property available.
For the outlook for 2010, economists are generally sceptical that prices will rise much further, with most seeing prices remaining flat for the rest of the year. However, any large changes in the rate of CGT in the budget this month, could see a a flood of 2nd homes hit the market if people want to cash in their gains, which would obviously affect prices.
Countrywide, the UK's largest estate agent, has seen an increase the number of houses put up for sale of 35% since the scrapping of Home Information Packs on the 21st of May. The surge may have also been boosted by the threat of rising Capital Gains Tax.
Rightmove saw a 34% increase in listings in the week after the announcement of the scrapping of HIPS. According to Rightmove, this jumps shows that more speculative sellers have been encouraged to put their properties on the market.
The Government's proposal to raise the level of Capital Gains Tax to 'somewhere closer to income tax rates' has angered many people, particularly buy-to-let investors who have invested in property for retirement, but because of the proposed changes, may now not realise much of a return.
This has led to a flurry of investors looking to sell their properties prior to the tax hike coming into effect,w ith Savills reporting a 40% increase in valuation inquiries over the past 10 days.
Of course if the market is flooded with former buy to let properties, prices are going to go down and the time to achieve a sale is likely to lengthen.
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