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House prices flat as market 'dogged by uncertainty'

January marked the eighteenth month that house prices did not rise, according to Hometrack.

 
House prices flat as market 'dogged by uncertainty'

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.

9 comments so far. Why not have your say?

Keith Simmonds

Jan 30, 2012 at 12:30

The real rate of return is negative when the impact of inflation at say 4% is taken into account.

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Paul Doran

Jan 30, 2012 at 12:42

When will it all end?

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joe stalin

Jan 30, 2012 at 12:47

Why do people give so much credibility to these so called price trackers? Their numbers must be skewed towards the Northern metropolitan areas where there has been a lot of speculative building to encourage the "urban professional market" on the ack of regeneration. If the jobs dont grow at the same rate you are always going to have an overhang which will have an impact on prices. Realistically hoese prices have not fallen out of bed as tese guys were predicting three years ago and ever since and probably will continue to do so for years to come. why not listen to the builders they are all reporting highre prices per unit built. why is that? Buyers want quality and presumably do not want to pay £150,000 for an urban professional box in the North East.

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Geoffrey Ashby

Jan 30, 2012 at 13:29

I have just bought a period property in a picturesque village in North Yorkshire where the price was obviously way over local wage levels but relected rarity value and was acceptable to those of us fortunate to be able to buy with own funds. My Flat in London is ridiculously valued due to the irresponsible Interest only lending to buy to let Landlords in the past few years; the prices of Flats is way above what can be afforded by 'normal' buyers on a repayment mortgage but strangely enough there appear to be many buyers around with funds to purchase for renting out at a very low yield - if they are borrowing then a slight upwards movement in interest rates will give them problems:however, Rentals are rising so prices are also moving upwards - I view this Market as fragile in present/future economic conditions. I also have a House in a unique position out of London which I shall sell soon - this is in the Million pound category where there are many possible buyers with the funds available. All my Propetties are unmortgaged fortuately. My Solicitors tell me that there are certainly many buyers around with adequate funds and that where loan to value and income criteriaq are met then Mortgages are no problem- but my House is a rare situation,

The fact remains that Propertties generally are beyond the reach of 'normal' purchasers simply because they were driven sky high by past irresponsible lending and sustained due to reluctance to re-possess. The Government presumably looks to inflation to sort this out over time, providing lenders maitain streict control on lending. What was allowed to happen to house prices by Government lack of intervention on lending was almost criminal and of course the Economy is now lacking this contribution to employment and taxation.

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MC

Jan 30, 2012 at 14:40

Joe Stalin your very naive, Housebuilders are only building slectively. That is why they are reporting higher prices per unit built. They have mothballed apartment and larger (affordable hosuign schemes) focussing on smaller higher value schemes. If you build less units and focus only on high end spec you will increase your average sale price, but this says nothing of the overall market. The volume of new home sales is a fraction of what it was so is far from representative. The same can be said about other indices, halifax/Nationwide are both lending less and are being more selective so their average figures will be swayed. Rightmove is another example, it has effectively priced itself out of the lower end of the market. Stick to the Land Reg, it may lag by a couple of months but at least it takes in the full market. Its figures show massive falls in the provinces, but also in the poorer parts of the capital.

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Dislexic Landlord

Jan 30, 2012 at 15:56

The market will drop futher thats for certin

How much and for how long nobody REALLY knows

Landlords like my self are doing very nicley out ofthe current situation again for how long no body knows

Im makeing hay while the sun shines

Just get on with it do the best you can and hopefully it all works out well

Every propery market has a silver lininng

you just have to look for it

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L MACKAY

Jan 30, 2012 at 20:02

No surprise the north east is crashing hard. This is the most economically deprived region in Britain where just over a decade ago the average house price was around £40k. In one famous case, a street of houses in Newcastle were sold for 50p each!

Then, after several years of Labour splurging, sub prime and NINJA loans, NE house prices rose over 200% in many areas.

Now all that's been wiped away the region is staring into the abyss. House prices in less desirable areas (i.e. much of the region) are down 30-40%

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Medved

Jan 30, 2012 at 20:49

I agree with Dyslexic. People obsess about the "price" when they should be looking at income and yield. Same mistake they make with shares.

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Dislexic Landlord

Jan 30, 2012 at 21:06

FAO L Mackayyou are 100% right

I make my liveing in the NE and see the market today

and yes its 40% below the prices of 2007

My father said only two men brought wealth to the NE The kieser and Hitler and he was right

When London gets a cold the North East get s the Flu if not worse

but as an investor I see oppertunity even geordies need homes

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