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Falling prices see buyers facing 'double squeeze'

Wednesday, 1 December 2010 9:39 AM

Those looking to buy a new home in the UK could soon be faced with the 'double squeeze' of lessening supply and an increasingly-difficult mortgage market, an expert has said.

However, new figures from the Nationwide building society have revealed that the average price of a UK property fell 0.3 per cent in November, to £163,398. This represents a slightly bigger fall than the 0.2 per cent expected.

Meanwhile, the annual rate of growth plunged to just 0.4 per cent - its weakest figure since September 2009.

According to Nationwide's chief economist Martin Gahbauer, much of the property market's problems are the result of a return of sellers to the market.

However, he added that supply pressures were beginning to ease and there was little evidence that house price declines would continue to accelerate in the coming months.

"There are early signs that the flow of new property onto the market may be slowing down again as potential sellers observe the recent weakness in prices and decide against marketing their properties at the current juncture," explained Gahbauer.

The expert warned that the current trend could lead to a repeat of late 2008 and early 2009 figures, when a decline in the amount of available property was driven by similar behaviour.
 

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