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Lack of demand hits housing market

Lack of demand hits housing market

Category: Mortgages

Updated: 16/07/2012
First Published: 13/07/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The average house prices for last month have shown a slump, worrying news to people looking to sell their homes.

The average monthly house price in England and Wales fell to £224,102 in June from May's average of £224,246. Whilst marginal, this fall is believed to be due to reduced demand and general lack of confidence in the market from prospective buyers.

LSL Property Services, who compiled the research, has also revealed that the number of house purchase transactions fell dramatically last month to around 57,000, its second lowest level since 1995.

This dip in activity is expected to continue over the next couple of months, with the Olympics anticipated to have a negative impact on the number of homes sold. Travel restrictions in the London area will no doubt quash any intentions of house hunting in the capital.

Richard Sexton, director of e.surv, said: "Despite the annual improvement in house prices, transactions hit a near record low in June, with an estimated 57,000 taking place. This wasn't, however, a sudden deterioration in the health of the housing market but, rather, a combination of record rainfall and the Queen's Jubilee which conspired to disrupt buyer activity and prices in the short-term.

"Nevertheless, the long-term overriding factor hampering buyer activity remains the lack of mortgage finance available to those without substantial deposits and it is this that will dictate the future direction of the housing market."

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