Expectations are that the housing market will stabilize do not seem to be true for the moment. According to the latest figures, prices fell sharply by close to a percent last month: this puts the annual growth rates of the property market, showing a 5.7% rise in May, at their slowest in 4 years.
Forecasts are for a two percent fall in prices during 2005, although it was said that the economic fundamentals underpinning the housing market were still sound.

Though a marginal rise was shown in May, the average price of a house fell by more than a £1,250 to £156,000 representing a flat housing market for 2005, confirming that the market is experiencing a soft landing after the growth of the past ten years.

According to the Bank of England the market will continue to be supported by robust economic growth in the UK – helped in part to interest rates remaining at historically low levels.

A leading analyst for the bank said that the market is underpinned by sound fundamentals including record employment levels, good affordability and rising incomes.

Comparatively sales activity has normalized recently, with the number of home loan approvals rising for the third month in a row. This is positive news for some first-time buyers who have previously found themselves priced out of the market.