UK house prices inflation in the UK continued to ease off in July, the Nationwide building society has said.
Its latest monthly survey shows that prices fell by 0.5% this month, taking the annual rate of house price inflation down from 8.7% to 6.6%.
The price of the average home is now £169,347, almost the same as it was in July 2008.
The Nationwide said price rises were easing off as more homes were being put up for sale.
“At the moment, the market is clearly easing relative to the very tight supply conditions that characterised it since early 2009,” said the society’s chief economist Martin Gahbauer.
“A combination of restrictive credit conditions and uncertainty about the future economic outlook continues to limit the pool of buyers to those with relatively large financial resources,” he added.
It will take several more months to establish… whether a period of downward trending prices may be in store”
Buyers typically still have to put down a deposit of at least 25% to secure a mortgage as banks and building societies continue to ration their mortgage lending in the wake of the credit crunch and banking crisis of 2007 and 2008.
The Nationwide pointed out that the number of completed home sales was still running at about half the level recorded before the credit crunch started.
Since the spring of 2009 prices had been pushed higher again, mainly by a shortage of homes coming onto the market for sale.
However, the Nationwide said it was unsure about where prices were heading.
“It will take several more months to establish whether house prices are now simply oscillating around a flat price trend or whether a period of downward trending prices may be in store,” Mr Gahbauer said.
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