Nationwide released their January house price index this week, showing the average property value fell by 1.3% for the month, and bringing the annual fall to 16.6%.
With the average value now given as £150,501 and according to the Council of Mortgage Lenders the average mortgage around £100,000, this set of numbers would exclude you from obtaining almost all of the most competitive mortgage deals currently on offer.
The 3 month average, regarded as a better indicator of pricing trends, improved for the fourth consecutive month, although the trend is still down. Nationwide said that it is too early to say whether this marks the start of a sustained improvement in the short term trend.
Martin Gahbauer, Nationwide's Senior Economist said “while the economic news is clearly negative and there appears little prospect for noticeable improvement in the short term, it is easy to lose sight of the fact that a considerable amount of stimulus has been provided over the last few months. The MPC has cut interest rates to their lowest level in the Bank of England’s history, and financial market pricing implies that further reductions are to be expected in the next few months”.
“While the rate cuts have so far not had an immediate impact, this should come as no surprise. Historical experience suggests that interest rate cuts typically take 18-24 months to feed through into the wider economy, so it is certainly still too early to claim that they are having no effect”.