Nationwide Building Society concerned about UK property sector

The Nationwide, one of the more savvy lenders in the mortgage market, has this week issued a very downbeat assessment of the UK housing market. After we saw the first fall in UK property prices for 10 months, between January and February, there is growing concern at the Nationwide that we could well be on the verge of a second downward slide in the UK housing sector. But why has the Nationwide become so negative so quickly?

While it is dangerous to take figures from one month and extrapolate a potential future trend there is no doubt that activity within the housing sector has stalled somewhat since the end of 2009. In the final quarter of 2009 we saw a number of property buyers stepping forward to take advantage of the stamp duty concession but now stamp duty rates are back to normal there are concerns about the immediate future of the UK housing market. As we have mentioned on numerous occasions, there is the potential for UK house buyers to "talk themselves into another downward spiral" with more and more investors likely to sit on the sidelines in the short term and see how the next couple of months develop.

When we see prominent figures such as the Nationwide questioning the strength of the recent recovery in the housing market it does tend to make many people think again!