Uk Housing Prices Climbs In Just 11% Of Areas
Demand for new houses is slipping and the property market recovery is getting stalled
as the nations inflation rate falls for the first time in the year. This is the assessment of the Land Registry office based on a market report from Hometrack, the UK-based property information specialist.
Dismal Performance Statistics
Hometrack paints a subdued prognosis for Britains property markets with supply outstripping demand. It also said that the average house price inched a negligible 0.1% in June in 11% of the countrys property markets down by 25% reported four months back. Hometrack's report further states that new property buyers pay up an average of 94.3% of the asking price and new houses on sales take 8.4 weeks to sell.
Earlier, the Land Registry reported a general dip of 0.2% in house prices in May which it claimed to be the first dip in a year. But while demand for new homes is being outpaced by supply, sales transactions continue to slowly increases and real estate agents were not reducing their prices. The official numbers from the Land Registry showed that the average house now costs 165,314, up 8.2% on a year ago which is a good indicator that the property market is recovering. According to Hometracks monthly report, property agents all across England and Wales report 0.1% climb in new home registration, but estate properties on sale had increased by 2.9%.
Hometrack's research director Richard Donnell said that the growing supply/demand imbalance spans the country and under normal market conditions this would typically result in a downward pressure on prices. However, very low transaction volumes are exacerbating the scarcity of housing for sale and this is acting as a support to prices.
Cautious Outlooks
According to Hometrack, it now costs 158,900 for an average house in England and Wales, up by 2.1% annually. This is less than the figures reported by the Land Registry. But Hometrack states that its monthly report is based on figures taken from 1,500 estate agents who regularly report a lower housing inflation figures compared with those reported by the Land Registry and mortgage lenders' surveys.
The mortgage lenders figures from the most recent Halifax and Nationwide reports, showed prices up by 6.9% and 9.8% in the year ending May, respectively.
A senior partner at Carter Jonas property consultancy, David Smith, said that May's Land Registry figures was less than encouraging as things tend to get tougher for the property market. He opined that although the market is hardening at its current level, sought-after properties in desirable locations may see further price rises, whereas undifferentiated properties in certain areas may see falls.
Looking further ahead, Hometrack prognosticates that house prices are headed to a stormy near future thanks to interest rate rises and the shrinking household budgets. Hometracks Donnell said: 'In a low interest rate environment, scarcity and low turnover can support prices in the short term, but higher rates are likely to be the catalyst for a material change in housing market conditions. GP
by: Simon Drew
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