Nationwide today released the first set of figures on house prices for July, and the pace of decline has picked up. After falling 0.9% in June, the fall in July almost doubled to 1.7%, and leaves the annual change down over 8%. Even with the average house price now £15,000 lower than this time last year, the number of house purchases continues to fall, reaching only 36,000 in June, a third of the level this time last year. This is due in no small part to the lack of first time buyers. There are over 40% fewer first time buyers now than 12 months ago, as they wait to see how far the market will fall and continue to save for the larger deposit they now need to be able to raise a mortgage. The average house is now worth £169,316, it’s lowest level since August 2006
The gloomy picture of the UK economy continues as inflation remains well above it’s 2% target, and with retail sales falling dramatically in June, consumers facing higher food and energy bills, the prospects don’t look too rosy. These rising costs have a double whammy effect of adding to inflation and squeezing disposable income, so consumers will be tightening already tight belts especially in light of the British Gas announcement yesterday of an immediate hike in gas bills of 35%.
If you are a British Gas customer, or are worried that your supplier may follow suit, then use the link below to search for cheaper suppliers, or those offering a price cap. Energy Helpline The Crosby Report
James Crosby published his interim findings this week into his search for a solution to the funding problems in the mortgage market. The report, requested by the Chancellor in April is due in the autumn, but this interim analysis offers no clues to his eventual recommendations. In his letter to the Chancellor, Crosby states his belief that the shortage of mortgage funds is unlikely to ease in the short term, and that he may yet recommend that the Government not intervene, for fear that it would create more problems than it would solve.
On a more positive note, there has been some good news for borrowers as lenders continue to pass on the reduced cost of borrowing. Both fixed rates and tracker mortgages have come down so fixed rates below 6% are more common, and deals tracking below bank base rate have reappeared. Mortgage Best Buys