Affordability remains a concern in the UK property market

The stock of unsold homes in the UK is rising steadily, but the array of properties is failing to tempt buyers as homeowners demand ever-higher prices, according to property website, Rightmove.

In its monthly survey of house prices, Rightmove illustrated that the number of unsold properties in the UK is at its highest level since the company began to publish its surveys in 2002. The website’s figures also showed that while homeowners were pushing up the price of their properties by as much as 0.8 percent, selling prices have fallen by 10 percent since their peak last year.

Experts have delivered dire warnings regarding Britain’s housing market as the credit crisis takes its toll on lenders and leaves first-time buyers struggling to get a footing on the property ladder. Moreover, Bank of England policy maker, Kate Barker, has said that falling house prices would do little to help would-be buyers enter the property market as affordability was unlikely to improve.

Commercial Director of Rightmove, Miles Shipside, says, “In the current market, sellers should price below their competition to achieve more interest now and avoid a larger price-drop later in the year.” However, sellers are increasing their prices, thus negatively influencing the affordability of property in the UK.”

Member of the Monetary Policy Committee, Ms Barker, told the media that “We may see prices adjust downwards but there is no clear evidence that affordability will improve. Mortgages, particularly for first-time buyers, have become more difficult to get as a result of the credit crunch.”

Barker’s statement comes amid recently-published mortgage approval figures, which revealed that the rate of mortgage approvals – already at their lowest level for more than 10 years – has now fallen even further.

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