While the weather was hotting up last month, house prices cooled according to Nationwide, contributing to the almost horizontal path of house price growth for 2005.
Their latest data for June says that annual house price growth has now slowed to just 4.1%, compared with 19% twelve months ago.
Ongoing stalemates between vendors and buyers continue to contribute to this sluggish market, and without any pressure on the vendors to reduce prices, the stock to sales ratio is not likely to rise in the future, according to the mortgage lender.
The sharpest slowdowns are occurring in the East Midlands, the Outer South East, East Anglia, and Wales where the rate of house price growth more than halved. Prices in the north, however, continue to grow more quickly than those in the south.
The June report falls short of recommending a fall in interest rates to help get things moving again, but it does say: ?If interest rates do move south in the autumn, only small price adjustments should be necessary to bring some liquidity to the market
?Current affordability is not the only factor to consider; uncertainty about the economic climate is also playing a big role,? concludes the analysis.
It seems that nobody is now forecasting a pick up in activity this year, and Nationwide thinks the next decision the Bank of England?s Monetary Policy Committee (MPC) makes will be extremely significant.
?It seems that many consumers are taking the ?wait and see? approach to house buying and selling, because of the uncertain climate, and the potential for interest rates to also rise,? said Fionnuala Earley, Nationwide?s Group Economist. ?The next MPC meeting on July 7 will have big implications as to what happens next.?