The latest Nationwide House Price Index indicated a slight decrease for the first time in four months during the month of August.  The post of a 0.6% decrease was the first non-growth reading since the month of April of this year.  During that month, a 0.2% decline took place.  The UK housing market is generally viewed currently as being in a slump by many.  Concerns are mounting about the months ahead, due to the summer season demand coming to an end.

Robert Gardner, Nationwide chief economist, commented on the demand in existence right now, saying: “For some time now the residential property market has been moving sideways, as weak demand for homes coexisted with a situation where relatively few homes were coming on to the market.”

Gardner added: “A further fall in employment would be likely to upset the relatively delicate demand-supply balance and put downward pressure on prices.”

Gardner commented on the recession of 2008 and compared that with the 1990’s economic down turn.  He mentioned the workforce has become much more resilient as a result of a more flexible labor market which has developed within the last few years.

Howard Archer, economist at IHS Global Insight, commented on how multiple factors have impacted home prices, saying: “We suspect that squeezed household purchasing power, tightening fiscal policy, a weakening labour market and persistent serious consumer concern over the economic outlook will limit potential buyers and weigh down on house prices.”

Archer also noted how strict lending criteria are adding to the inability of young borrowers to grab the property ladder’s first rung.  Large deposits and very clean credit are still requirements for anyone in search of a mortgage loan.