The most recent figures released by the Land registry indicate that house prices continue falling for the 15th month in a row and the main reasons are said to be the reduced availability of mortgage loans as well as the higher rates lenders are charging. Officially, house prices dropped by 0.6% in March, the latest statistics, and oddly that was also the average percentage of a drop in prices over the year as well.
These figures came out on the very same day that lenders raised mortgage rates for more than one million homeowners. Lenders blamed the economy for this rise as they claim there is an increased cost involved in funding mortgages. Most of the borrowers affected are customers of Halifax and the average rise will total approximately £200 per year. Other banks who have notified customers of a rate increase include Co-operative Bank, Yorkshire Bank and Clydesdale Bank, although their increase in rates are not said to be as high as those imposed by Halifax.
The north east did experience some rise in prices with a 5.6% increase in March but that is a bit misleading as overall, the yearly drop for that area of Britain fell by an average of 2.8%. Even London that has been fairly steady throughout the housing crisis saw a fall in average house prices during March with a drop of 1.8%. On the other hand, London also saw the largest increase on an annual basis with overall rise in house prices of 0.7% for the year.
Wales saw the largest drop with 4.1% for the month and for the year the decline in prices was 5.5%. However, the latest data shows that purchases are up a bit but this is not really seen as a stronger market. Rather, the end of the stamp duty forgiveness that ended in March caused a rush to complete transactions before first time buyers had to pay the tax. The end result is that the housing market is still weak and the forecast is not good.
