View the article online at http://citywire.co.uk/money/article/a561737
House prices flat as market 'dogged by uncertainty'
January marked the eighteenth month that house prices did not rise, according to Hometrack.
House prices across England and Wales remained flat in January – the eighteenth consecutive month prices have not increased, according to new figures.
London saw a small 0.1% rise in prices, which has offset falls in other regions. And this trend looks set to continue through 2012, according to Hometrack, thanks in large part to the Olympics.
At 0.4% the North East saw the biggest decline in prices.
On a national basis, however, in what Hometrack describes as a ‘slow start to the year’, the underlying trend is one of ‘tightening supply and weakening demand’.
In the first half of last year demand for property dropped 11% as concerns over the economic outlook and the Eurozone crisis continued to take their toll. The number of buyers registering with agents also fell 23%.
Southern England – excluding London – has seen the biggest decline in demand over the last six months and at 9.1 weeks, the amount of time houses spend on the market is at the highest level for almost three years.
Supply similarly fell in the second half of 2011, with the amount of homes coming onto the market down some 6% – the biggest reduction seen in supply since 2009.
Looking ahead Hometrack said it expects prices to continue falling in the coming months and predicts only a modest improvement in levels of demand. Overseas buyers, however, are likely to continue to view London as a safe haven in the midst of global uncertainty.
Richard Donnell, director of research at Hometrack, said the latest survey reveals a market that is ‘dogged by uncertainty’.
‘The latest survey of 1,500 agents and surveyors from across the country shows a slow start to the year with an extension of the seasonal slowdown and weak consumer confidence resulting in lower new buyer registrations and sales,’ he said. ‘Looking at the underlying trends a clearer picture emerges of tightening supply and weakening demand’.
Earlier this month property website Rightmove reported that house prices had fallen 0.8% in January, predicting a 'challenging and fragmented' year ahead.
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