Official figures show stagnant housing market

New government figures showed that house prices remained flat in May, as it became increasingly hard for consumers to secure attractive mortgages and make purchases.

The Land Registry reported that house prices showed no monthly change in England and Wales in the month, meaning that the average property still cost £183,266.

Tightening mortgage lending criteria since the credit crunch began means that annual house price growth declined for the ninth month in a row in May. Prices in the month are only up 1.8 per cent on the same period in 2007.

What''s more, the government data indicated that the stricter lending criteria have really slowed the number of house sales in the UK.

A statement from the Land Registry noted: "The most up-to-date figures available show that during March 2008 the number of completed house sales fell by 50 per cent to 53,080 from 106,047 in March 2007.

Recently, the Building Societies Association (BSA) reported that it believes property prices will fall over the next twelve months.

Typically, lenders said they thought prices would drop 7.1 per cent over the next year.

Adrian Coles, director general of the BSA, said at the time: "It is clear that the positive outlook that has characterised the property market for the last few years is now a thing of the past, and people expect prices to fall over the next year.

"However, this must be kept in perspective. Property price inflation has been so great over recent years that a 7.1 per cent fall in prices means that most people still have considerable equity in their property."