House prices across the United Kingdom have fallen for the third month in a row according to one of the country’s biggest mortgage lenders.
The decline was unexpected by economists who had been predicting house prices to remain steady. The UK has been hit by a series of poor data releases causing the Pound to suffer against the Euro. According to the Halifax, UK house prices fell by 0.4% in September and are 1.2% lower than compared to last year.
“The generally weak economic climate remains a significant constraint on housing demand, Overall, there has been very little change in the average UK house price so far this year ” Halifax economist Martin Ellis said.
“There is, nonetheless, evidence of a slight deterioration in the trend recently with prices in the three months to September 0.5% lower than in the previous quarter. The relatively low level of mortgage payments in relation to income, however, continues to provide support for house prices. We expect house prices to be broadly unchanged over the rest of this year and into 2013,” he added.
The Bank of England introduced an £80billion funding scheme at the start of August in an effort to encourage banks to lend to households and businesses. Ever since the credit crunch in 2008 the banks have been reluctant to give out mortgages.
They claim that since the scheme was introduced the number of approved mortgages has gone up, but for many first time buyers this has not been the case as the banks tightened their borrowing criteria making it harder for people to get a mortgage.
A few hundred thousand Santander customers saw their mortgage costs increase this week as the lender hiked its standard variable rate, resulting in an average increase of £312 a year for a typical £100,000 mortgage.
The Pound to Euro exchange rate is currently trading at 1.2445
The Pound to US Dollar exchange rate is currently trading at 1.6114
The Pound to Australian Dollar exchange rate is currently trading at 1.5769
The Euro to US Dollar exchange rate is currently trading at 1.2944
The Euro to Pound exchange rate is currently trading at 0.8033
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