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House Prices and Mortgage Costs to fall

There is increased downward pressure on house prices as the ratio between potential buyers and the number of properties on sale gets wider, according to a study.

And a separate study has revealed that mortgage payments worked out as a percentage of monthly disposable income has dropped to a 15 year low.

Property analyst Hometrack, who conducted the study into house prices, say that prices of are likely to fall further than the 1pc witnessed throughout August, for the rest of the year. The main reason for this is a decrease in the number of potential new buyers, and an increase in the amount of homes coming to market.

Director of research at Hometrack, Richard Donnell said: “The balance between housing supply and demand is widening, suggesting further downward pressure on prices. Demand is up by 10pc over the year to date, while supply has grown by 19pc”

Separate research from Halifax has also revealed that mortgage costs have dropped to a 15 year low, with mortgage payments averaging 26pc of monthly income for both first time buyers and home movers.

This means that over the past five years mortgage payments have nearly halved as a percentage of income, after a peak of 48pc in 2007.

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