As the third quarter closes out as the month of September ends the housing market will have remained struggling with no recovery.  Despite the weak housing market the economy is expected to pull out of the double dip recession in the latest quarter and data will be available by next month to reveal whether or not the recession has indeed ended.  The month of September had a further decline in the average house prices for England and Wales according to property analysts from Hometrack.

Hometrack’s data for the final month of the third quarter revealed a price drop for the month of 0.1% and this concludes the quarter with all three months having experienced a drop in the average house price each month of 0.1%.  September not only resulted in a decline in the average house price but also it was the first month since January of this year in which the number of sellers on the market decreased.  Properties have been outnumbering buyers by a large amount and buyers coming to the market have been declining.  When property supply outnumbers buyers the house prices will struggle to regain any ground toward previous levels.

The Funding for Lending scheme launched by the Government which provides funding for lenders at low interest rates is helping to keep loans available to borrowers at cheap rates.  The full impact of the scheme has yet to be felt and experts are hoping it will help support growth in the housing market as borrowers will find deals from lenders to be more attractive than in months past prompting them to enter the market and buy.

Richard Donnell, director of research at Hometrack, said, “While the Government's Funding for Lending scheme is likely to support a modest increase in mortgage lending, the uncertain economic outlook, together with affordability pressures, will continue to act as a drag on housing market activity. Pricing will remain under slow, downward pressure but the tightening of supply will limit the scale of price falls in the short term.

“The legacy of summer, which saw a slowdown in demand driven by seasonal factors compounded by the Olympics, has continued into September. This has added further to low consumer confidence which has been a feature of the housing market for some considerable time.”