Prospective buyers have started to accept that house prices may be out of their reach, according to Nationwide.
Recent figures from the Land Registry show the number of residential housing transactions dropped to 103,690 in April, down from 109,570 in February 2014, to 104,930 in March. This represents a drop of 5.4 per cent in a two-month period.
Speaking to Money Marketing following the building society’s results yesterday, Nationwide group director Alison Robb said volumes have been hit by the mortgage market review, but that more importantly, prices in some areas have reached levels that many buyers simply cannot meet.
Robb said: “If you look at the number of transactions on a monthly basis, we have gone from beyond frenetic just before Easter to what we categorise as very busy – especially around London where prices have risen fastest.
“Undoubtedly the new processes and systems brought in as a result of the MMR have led to some lenders experiencing delays, but the slowdown in transaction numbers, we feel, is more to do with people starting to hit their limit in terms of what they can afford to pay.”
Yesterday Nationwide announced it had grown its mortgage lending by 31 per cent in the year to April, with a total of £28.1bn advanced to buyers.