Small fall in South West house prices prompts positive predictions
House prices in the region have fallen steadily in the last eight months but only by a small amount, as families continue to keep tight control on their finances.
A new study by the Nationwide has highlighted a year-on-year decrease of 0.9 per cent in the value of properties.
But the building society believes the picture is unlikely to change much until people see their personal finances beginning to pick up and wages improving to keep up with the cost of living.
Richard Copus, Westcountry executive for the National Association of Estate Agents (NAEA), who runs Richard Copus Estates, said the national picture was very much reflected locally.
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He also pointed to a feeling of more confidence in the housing market and predicted a better new year.
“The Nationwide figures tally with what is happening here,” he said.
“Overall I think there is more confidence in the market.
“People are putting offers in and following through and chains are also holding together better.”
Mr Copus added: “People are still moving.
“People who are having families are up-sizing and people who are retiring are downsizing. The market is still working.
“There seems to be a feel-good factor coming in and as long as nothing nasty happens before Christmas I think in January and February we could see an improvement.”
The Nationwide said that despite figures last week showing an end to the longest double-dip recession since 1950, the economic recovery was likely to remain “fairly sluggish” as households try to repair the state of their finances rather than spend.
Robert Gardner, the company’s chief economist, said: “The situation is likely to remain challenging in the housing market.
“Although the UK has been adding jobs in recent quarters, even in the midst of recession, conditions remain very difficult for households.
“Wage growth is still not keeping up with the cost of living and unemployment is still well above normal levels.
“This helps to explain why housing market activity has remained subdued, with the number of mortgage approvals still running at little more than half their long-run average.”
Figures from the British Bankers’ Association (BBA) showed that mortgage approvals for home buyers reached a five-month high in September, but they still remained below the levels seen last year.
The BBA said households had “no appetite” to take on more debt and that demand for loans remained weak amid the uncertain economy.
The report said monthly prices had failed to show any strong trend over the past half-year, with three months of price increases and three months of falls since May, but the market continued to be relatively stable overall.