House prices have declined according to the property listing Web site Rightmove.  It marks the first decline for the year and could be a natural correcting to the rising house prices of the last few months or it could be the normal demand usually shown during the summer month of July.  Rightmove reported that the average asking price for UK property fell by 0.8% in July to a value of £270,159. 

Mortgage lending has tightened due to the Mortgage Market Review instated in April to promote responsible borrowing and lenders have on their own induced protocols but demand continued to move pricing upwards.  This caused many to be concerned of a housing market bubble which would be damaging to the UK economic growth and recovery.  The decline in the average house price in July might be viewed as a correction and perhaps put off the expected increase in the Bank of England’s standard base rate. 

The current rate is now at 0.5% which is an historic low and while it cannot rest there long as the economy strengthens, moving it too quickly will stunt progress in the economy.  Therefore, the Monetary Policy Committee will be monitoring many factors before deciding on an increase.  Currently the forecast by most economists is for the rate to be increased for the first time as early as November.  If so, it would mark the first increase to the Bank’s rate since March 2009.

As warnings increase, homeowners will begin to show stronger demand for remortgages.  This will be to take advantage of the cheap deals currently available as well as many seeking an escape from their lender’s risky standard variable rate.