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Property market 'is frozen'
Despite recent price increases, the property market is "frozen" and there is not a "real demand-led recovery", Nationwide's chief economist has said.
Although latest reports by Hometrack, Nationwide and the Land Registry show signs of improvement for the housing market, Martin Gahbauer said that for real recovery to take place there needs to be an influx of first-time buyers into the market in order to inject equity.
He said that prices had stabilised but this was not down to increased demand because first-time buyers were still finding it difficult to afford a deposit.
Mr Gahbauer said: "In essence, prices have stabilised for the moment but it is not a real demand-led recovery, it is more likely a frozen market at the moment more than anything else."
He added that there was "very little" money available in the banking sector at the moment and this was acting as a "restraint" on mortgage lending.
Hometrack reported on June 1st that the average property cost £155,600 in May. This is the same figure as April and is the first time for 20 months that prices have not suffered a month-on-month fall.