Peter Rollings responding to Halifax's latest house price index
Sun 05 Aug 2012
A lethargic mortgage market and faltering economy have conspired to undermine house prices, and the performance of central London is masking even greater falls around the country. Securing an affordable mortgage without a colossal deposit is an Olympian task for the average buyer, and this is reining in competition for properties across the country preventing sales prices from climbing back to anything like their pre-crunch heights.
Recovery will be dependent on the ability of the Funding for Lending scheme to unlock the lower echelons of the housing market. At present, lenders are providing the low-risk equity-rich buyers with incredibly cheap rates. But if we are to see consistent price rises outside the boundary of the M25, cheaper finance must reach higher LTV borrowers, re-igniting buyer activity from the bottom-up. As things stand, it is only cash-rich areas like prime London that are able to defy the effects of historically weak mortgage lending.