View more on these topics

Housing market downturn

After several months of looking like recovery was on the way, the UK property market is suffering again with average house prices down according to data from, the new homes website.

The monthly report released today by reveals that the average price of a new home in the UK in September 2005 was 255,916, down 5.3% since the same time last year. This is the sixth consecutive month of negative annual price inflation and represents a sharp decrease on last months average price, down 2.3%. Prices are also down on average 2.1% over the last quarter, which is the first quarterly decrease since May 2005.

Regionally, only Scotland, Wales and East Anglia escaped the wider market downturn reporting positive price growth over the last year. London remained the most expensive region of the UK with prices increasing yet further over the last few months. The East Midlands has the cheapest average new home price but despite this remained one of the least popular regions of the UK with more people moving out than moving in. This pattern was duplicated in the West Midlands and London with Scotland, the South West and Yorkshire and Humberside experiencing the reverse trend with an influx of homebuyers outnumbering departures.

David Bexon, managing director of, says: Although we usually expect house prices to be picking up again after the summer slowdown at this time of year, we have experienced a further downturn in the market. This can be down to a number of factors with not least the pressure on the economy from the global oil crisis, limited consumer confidence and reduced high street spending contributing their parts.

However the demand for housing and indeed new homes is still strong and therefore this months statistics are not likely to become a long-term trend. If the Bank of England responds to economic demands and reduces interest rates further next month, we are more likely to see the market returning to the stabilisation that has been present throughout the year to date rather than further decreases.

The proportion of new apartments for sale increased substantially from contributing around a third of all new homes, 36.7%, two years ago to over one half, 55.8% now. This illustrates how house builders are increasingly turning to smaller units to reach Government criteria for housing density and affordable housing provisions but places additional pressure on the supply/demand imbalance for larger family homes.


UKs high net worth growing

A report from independent market analyst Datamonitor reveals that the UK high net worth population grew by 12% in 2004, taking the number of wealthy individuals with more than 200,000 in liquid assets to over 916,000 and this number will continue to rise over the next few years. Many private banking providers are reviewing their […]

Base rate remains at 4.5%

The Bank of England left base rate unchanged last week at 4.5%. The previous change in base rate was a reduction of 0.25 percentage points to 4.5% on August 4. Michael Coogan, director-general of the Council of Mortgage Lenders, says: “The Bank’s decision to leave the rate at 4.5% was no surprise. Housing transactions, mortgage […]

Bethnal Green joins Lloyds TSB pilot

The branch of Lloyds TSB in London’s Bethnal Green has started offering Islamic banking services to the area’s Muslim community. The branch is the latest to join Lloyds TSB’s Islamic Financial Services pilot, which now covers 17 locations. Bethnal Green Lloyds TSB will now offer a current account and a home finance scheme designed to […]

Deeds release fees are in consumer groups’ sights

I always try to keep an eye on mortgage reporting in the consumer press to stay abreast of the hot issues. And there is one that is consistent and shows no sign of cooling. Last week I came across the latest salvo in The Guardian.


News and expert analysis straight to your inbox

Sign up