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Falling house prices attracts UK mortgage borrowers

Date: Mon, 19 Sep 2005

Recent falls in UK house prices have reportedly started to lure buyers back to the market.

A new survey by property website Rightmove indicates that average UK asking prices fell by 0.4 per cent (£875) during the five weeks to September 10th, dropping for the third month in a row. The average asking price for a home in the UK now stands at £195,407.

Rightmove claims that the latest figures suggest that a year-long recession in sales volumes has "bottomed out", with August, which is a traditionally a quiet month, showing stronger sales than each of the two previous months.

The property site attributes the increase in sales to a fall in interest rates, more realistic expectations of sellers and an increase in the number of pension-assisted buy-to-let funds entering the market.

The Bank of England's Monetary Policy Committee (MPC) opted to reduce interest rates by a quarter point to 4.5 per cent at the beginning of August.

Miles Shipside, commercial director of Rightmove.co.uk, commented: "There are now clear signs that some buyers see this as the time to re-enter the market. We could be at the bottom of this cycle of the property market, though continued realistic pricing is critical to keep the momentum going."

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