House prices fall but estate agent predicts soft landing
A leading estate agent in Northampton says the housing market is heading for a soft landing with property price growth continuing to level off.
Simon Bond, managing director of O'Riordan Bond, dismissed fears of a property price crash, saying house prices would continue to grow, only at a slower rate.
Mr Bond made the comments after Nationwide Building Society reported house prices had fallen by the biggest amount in 12 years. According to the mortgage lender the average cost of a home in Britain dropped by 0.8 per cent in November.
At the same time figures from the Bank of England showed the number of mortgages approved for people buying a home fell to their lowest level for nearly three years during October.
Just 88,000 home loans were approved for people moving during the month, the most subdued figure since February 2005 and well down on the recent monthly average of 109,000.
Fionnuala Earley, Nationwide's chief economist, said: "November's data confirms that the housing market is indeed cooling. Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market."
This month's fall, according to the mortgage lender, has reduced annual house price inflation from 9.7 per cent to 6.9 per cent, a lot lower than the double-digit growth of previous years, but still above inflation.
According to Mr Bond, the slow down in house price growth does not herald a crash but much-needed stability.
He said: "In real terms over the course of a year it's not about house prices going down, but the rate of increases slowing down a bit."
Mr Bond added: "Over the next six to 12 months house price growth will slow down to about inflation, which I think is going to be good in the long term.
"In the last few years house prices have just gone up and up and as a result fewer people have been able to get on the housing ladder. If house price growth slows down the market will be far more sustainable."
The price fall reported by Nationwide is just one of a handful of recent surveys showing a slow down in the housing market.
Earlier this month Hometrack, a research group, said house prices in England and Wales had fallen in November for the second month. And the Land Registry reported house price growth in England and Wales dropped in October to just 0.1 per cent.
mark.waffel@northantsnews.co.uk
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