Sluggish Housing Prices predicted throughout UK

The prediction on housing prices throughout UK is not good. According to the Nationwide Building Society there has been a slight rise in house prices in March 2011 amidst a sluggish outlook. Nationwide’s latest housing survey found property prices increased by 0.5% during March. However, this was unlikely to mark the start of a boom in house prices, the lender said. The cost of an average home was £164,751, some 0.1% more than a year earlier.

Gloomy outlook

The quarter by quarter analysis indicates, a smoother indicator of house price trends, has shown a 0.6% rise in UK property values. According to property experts of Nationwide, the demand is likely to remain fairly soft, but a rapid increase in the supply of properties also appears unlikely.

With the economic recovery expected to remain sluggish, the most likely outcome is that the property market will follow with low transaction levels and prices moving sideways or modestly lower through 2011.”

Mortgage demand

According to the Bank of England’s Credit Conditions Survey, the demand for mortgages for house purchases had fallen in the first three months of the year. Some lenders expected that demand would continue to fall in the next three months. It is the belief of industry experts that in a climate of rising unemployment, rising living costs and, sooner rather than later, rising interest rates, the demand for property inevitably will suffer.

Source; bbc.co.uk

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