Bad News For Uk Housing Market

2012 is proving an Inconsistent year for the UK housing market.  Property statistics are mapped monthly therefore figures for June 2012, have just been released.  It’s bad news for the UK housing market as house prices have fallen for the first time in 2012 and mortgage applications have also fallen.

The beginning of 2012 looked positive for the UK housing market.  There was an increase in people trying to sell their properties and the number of buyers also seemed to be picking up.  However this trend has rapidly reduced, which is confirmed by the latest set of housing market statistics.

Market analysts Hometrack have released figures showing that house prices have fallen for the first time in seven months by 0.1 per cent in July 2012.  This trend applies to the whole of the UK except for London, where growth reports have shown a 0.1 per cent increase in July.

There is also a discrepancy between the number of people selling houses versus the number of people buying houses as there more people wanting to sell than buy, therefore supply outstrips demand.

The Bank of England has further confirmed this trend by publishing the following figures:

• 44,192 home loans were approved in June 2012
• This has decreased from 50,544 in May 2012
• This is the lowest level since December 2010

These statistics illustrate that the UK economy is still slowing down and that hopes of coming out of recession are falling.  Furthermore, it has been reported that the UK is facing a possible ‘triple-dip’ recession.

The torrential down pour of rain and the Olympic Games in June and July are thought to have played a significant role in this downturn.  This was confirmed by Judith McKenna, chief operation officer at supermarket giant Asda, who said:

“The unprecedented poor weather for the time of year did not help, but retailers also expect conditions to remain tough during August. With consumer confidence weak and wage growth remaining sluggish, the longer term outlook for retailers remains challenging.”

The Bank of England still have one trick up their sleeve and that is to cut interest rates to 0.25 per cent to encourage spending.  It is likely that they will do this before the end of 2012.  It would be a boost for millions of homeowners with mortgages, however it would be a devastating blow for the UKs savers who have been continually been knocked since rates hit the record low of 0.5 per cent in March 2009.