Spring Bounce Does Not Last

Asking prices in June have showed a seasonally low increase, according to property website Rightmove.co.uk, which measures the asking prices of over half the UK market.

At just 0.2%, down from May?s small increase of 0.3%, house price inflation is commonly held to have ground to a halt, a situation which could be exacerbated by the low level of action in the coming summer holiday months.

Much of the stagnation which is crippling the market is due to first time buyers being unable to get onto the property ladder, as well as many sellers refusing to lose any of the worth which their property has accrued over the past three years, where in some cases the values of homes are now three times what they were.

This lack of action at the bottom end of the market does have implications further up, and the top end is also seeing a certain degree of stagnation as a result of inaction further down.

Rightmove suggests a cut in interest rates may increase consumer spending, and help to kickstart the market, as well as encouraging sellers to drop their prices somewhat in a ?summer sale? to get things moving.

?Having had it so good or many years, it?s now payback time for the property market,? said Miles Shipside from Rightmove.

?The reality is it will take seven years of static house prices and wage inflation to bridge the affordability gap. In the meantime we should expect lower sales volumes for several years as the market waits for buyers to play catch up.?