Price drops eclipse hopes of early revival in housing market: Hometrack |
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Mon, 25 Jul 2005 18:05
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LONDON: House prices continued to fall in July, the thirteenth month in a row, reported private research firm Hometrack. According to agreed sales numbers provided by estate agents, average house price dropped by 0.2 percent from the previous month and 3.7 percent compared with the same period last year.
The continuous decline in house prices has taken annual deflation to its sharpest in the last four years.
The survey found that prices had dropped across England and Wales barring a few, counties such as Berkshire where some price rise was seen during July. House prices had dropped in 39 counties and in 17 they had remained unchanged. The biggest price falls were seen in Hereford and Worcester.
Hometrack forecasts prices to be 5 percent lower by the year end, compared to last year.
Among its other findings: the number of agreed sales was seen to rise in July by 3.0 percent; in June it had risen 3.5 percent.
On an annual comparison, prices were down 3.74 percent, the sharpest fall in 5 years.
The current average house price at £161,300 was also the lowest since November 2003.
The firm’s economist, John Wrigleswort, said indicators such as prices, time to sell, and numbers of buyers, all point to a worsening situation despite a growth in the number of housing transactions. Despite what other surveys might say, no recovery signs were seen in the property market.
The Hometrack economist felt a cut in borrowing rates would reverse the downturn in consumer interest. The Bank of England’s Monetary Policy Committee is expected to slash base rates from 4.75 percent to 4.50 percent next month in an effort to revive the sluggish economy.
Hometrack expects the property market to plateau out in 2006 with factors like a friendlier borrowing rate and low unemployment.
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