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Number of property sales continues to slump

Number of property sales continues to slump

Category: Mortgages

Updated: 29/07/2011
First Published: 29/07/2011

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 It is now over 6 months old so the content may be out of date.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 number of people buying homes continues to slump, although house prices are stabilising.

Just 204,000 housing transactions were recorded between April and July this year, the lowest outturn since the second quarter of 2009.

The figures from Nationwide suggest that, while the uncertain economic conditions have had a marked effect on people's ability to buy a home, there could be more fundamental factors at play.

The share of home-ownership has fallen for seven years in succession, declining from a peak of 70.9% to 67.4% in 2009/10, with stretched affordability and demanding deposit requirements blocking many younger would-be buyers from getting on the property ladder.

Indeed, in 2009/10 the proportion of 16-24 year olds that were owner occupiers was just 14%; in 1991, the figure was 36%.

"While many people in the 16-24 age group still aspire to buy a home eventually, renting may also have become the more suitable option in the early stages of a career," said Robert Gardner, chief economist at Nationwide.

"People move readily between jobs, increasing the uncertainty about their earnings prospects and where they are going to settle.

"The improved quality of private rental stock is also likely to have made private renting a more appealing option."

Separate figures showed that the average price of a home in the UK rose by 0.2% in July, ending the month at £168,731.

Prices are now 0.4% down on the same point last year, while the last three months have seen a rise of 0.3% compared with the previous three months.

"Stability has been the watchword for the UK housing market over the past 12 months," adder Mr Gardner.

"Sluggish demand for homes, combined with only a gradual rise in the supply of available properties, has helped to keep property prices relatively stable."

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