Could buy to let property be less expensive?

03 September 2010

Written by Steve Olejnik

Expanding a buy to let property portfolio may be less expensive, as new research found house prices fell in August.

Nationwide's House Price Index fell from 333.4 in July to 330.5 in August, marking the second consecutive month of declines in the value of abodes.

The average price of a home in August was £166,507, falling 0.9 per cent from £169.347.

This indicates house prices declined at a faster rate last month than in July, when they experienced a 0.5 per cent decrease.

However, August saw a more modest year-on-year drop of 3.9 per cent, compared to 6.6 per cent in the previous 31 days.

Chief economist at the institution Martin Gahbauer noted the trend of falling values was in line with a correction in the balance between demand and supply - with the shortfall of homes decreasing.

"As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices," he stated.

However, he expected the pace of the decline in the worth of abodes to remain "relatively modest".

This comes after a study by the Bank of Scotland revealed one type of housing was rising in value.

According to the research, bungalows saw the highest increase in worth in the 12 months leading to July 2010.

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