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House prices to fall another 1% in 2013
The trend of falling house prices seen over the past two years is set to continue over the next 12 months, according to Hometrack.
by Michelle McGagh on Dec 24, 2012 at 00:01
House prices have ended the year 0.3% down as two-thirds of the country saw prices drop, but the property market has still held up better than last year.
Hometrack’s December survey shows 20% of postcodes registered price increases in 2012, but falls were recorded across 66% of the country. This means the average house price has ended the year down 0.3% over the 12 months to December, but is still far less of a decline than the 2.3% fall in 2011.
Unfortunately, the trend for falling house prices seen over the past two years is set to continue, with Hometrack predicting a further 1% drop in 2013.
Richard Donnell, director of research at Hometrack, said: ‘The underlying trend of prices falling in more areas than rising has been well established for the last 26 months and we expect this to continue over the year ahead.
‘We forecast national house prices to drift lower over 2013 with prices falling by 1%.’
December’s property figures attest to this gloomy outlook, with prices falling 0.1% over the month, the sixth consecutive month in a row prices have decreased.
This can partly be blamed on seasonal slowdown, which saw buyer registrations fall 4.8% and property listings drop 3.1%. It also meant it took on average 9.7 weeks to sell a house and the percentage of asking price gained this year was 93.2%.
Despite a slight drop in London house prices last month, prices grew across 70% of postcodes in the capital in 2012, up form 42% in 2011. A London property is on the market for an average of six weeks.
Hometrack said the London property market will have ‘an important bearing on overall house price growth in 2013’ and it expects prices to increase 2% in the capital over the coming year.
Donnell said: ‘The impetus for growth in central London looks set to slow in the near term as concerns about tax changes impact the upper end of the market. Affordability constraints will keep growth in domestic markets in check.’
The North-South property divide looks set to continue as Donnell pointed out that pricing in the South will continue to be supported by lack of supply and low turnover of property.
He said that the government initiatives to increase lending have now been priced into the market and affordability will continue to be an issue.
‘The lack of any clear value for money in the housing market means that affordability constraints and a general unwillingness by households to take on debt will continue to act as a drag on the housing market in 2013 – at least until such time as the economic outlook sees a clear improvement.’
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