UK house prices continue to fall throughout June
According to a recent survey of Estate Agents, house prices fell again in June due to the current subdued market demands. Prices month-on-month in June fell 0.1%, which takes the annual decline to 3.9%.
The current widespread budget cuts and job losses, together with low wage growth and rising inflation, mean that the second half of the year is likely to see some further downward movement in the prices of property. Richard Donnell, director of research at Hometrack, confirmed that “whilst the balance between supply and demand is not significantly out of kilter, subdued demand and weak consumer confidence are set to keep headline prices under modest downward pressure over the months ahead”.
The survey also showed that the number of sales agreed rose month-on-month to 10.6%. Last week it was reported that the British Bankers’ Association latest data showed an increase in mortgage approvals for the month of May, in contrast to previous months. Mr Donnell confirmed that “Sales volumes have increased off the back of higher demand and greater realism over achievable prices on behalf of sellers”.
The Agent’s Summary of Business Conditions, a summary of monthly reports complied by the Bank of England’s Agents, showed that lack of mortgage finance and market uncertainty continues to affect activity in the housing market. Minutes from the most recent Bank Monetary Policy Committee Meeting indicated that policymakers are realising there is an increasing need for quantitative easing, partly due to the lack of demand growth and partly due to fiscal challenges arising from the problems in the eurozone.
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