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Buyers Return to Housing Market

With the fear of diminishing house prices slowly coming to an end and property value beginning to level out. Buyers have begun come back to the housing market, especially first time buyers.

According to the housing pricing index, the average property value fell by about 0.4% in September. This is the third month in a row that housing prices have taken a tumble.

The 0.4% is the equivalent to roughly £900 per property. This brings the UK average down from £196,000 to £195,000; this only includes the month of September. Over the last three months prices are said to have fallen at least £3000.

However with the decrease in housing prices it is more of a concern to homeowners worried about the value of their property in the short to medium term, as house prices could continue to fall.

This situation is backed up by the fact that the annual interest rate of house price inflation is continuing to fall. In August inflation decreased by 2% followed by another decrease in September of one and a half percent.

Although the decline in house price inflation has and may continue to decline, property enquires and purchases are said to have doubled from the same time last year.

Since the recession began back in 2004 there are clear signs that the housing market is on the increase, and it could have happened sooner. Traditionally the summer months, especially August, are slow in terms of sales volumes and the amount of time a property has spent on the market.

However estate agents have reported that the month of August has all together out sold the previous two months, which is incredibly remarkable considering it is traditionally one of the quietest months of the year.

Estate agent executives have claimed that they can now see clear signs that the housing recession has come to an end. Although they recommend that housing prices should not take a significant rise in order not to scare off potential buyers.

Even banks and building societies are certain that house prices are not going to fall much more if at all.

Those (first time buyers) who have been waiting for mortgages rates to fall have been rewarded by the Bank of England as they cut interest rates last month.

No owner or estate agent is likely to drop prices significantly to encourage buying simply because the current state of affairs does not recommend that they do. They are not in a desperate situation at the moment and will continue to sit comfortably unless the economy slows and unemployment rises.

The housing market should maintain its current position or even improve in the not so distant future. It is currently benefiting from many contributions such as the decline in house price inflation, which has fallen below the annual earnings growth, and the cut in interest rates from the Bank of England.