Downturn in housing market continues despite rate cut: Hometrack |
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Mon, 29 Aug 2005 19:05
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LONDON: The downturn in the housing market continued for the 14th month in row despite a cut in base rate announced earlier this month. According to a survey by research company Hometrack, property prices in England and Wales continued to slip, bringing the annual rate of decline to 3.7 percent.
Hometrack’s survey is based on estate agents’ reports of agreed sales. In August, the average house price registered a month-on-month fall of 0.1 percent at £161,000 the lowest in two years. In July, it had declined 0.2 percent.
Although some activity was observed in the market during August, which revived confidence, it proved to be short-lived. At one point it was even believed that prices had plateaued and could soon resume their upward trend. However, the number of potential house buyers continued to fall while the number of properties on the market increased. Supply exceeded demand. Property dealers and intermediaries are not very hopeful of price rises in the coming weeks. The situation has given buyers the advantage of bargain and securing prices less by as much as 6 percent.
The recent cut in lending rates, (now 4.5 percent) clearly haven’t helped. Prices continued to drop in most regions across the UK. Avon saw the lowest price fall at 0.6 percent, followed by Buckinghamshire and Bedfordshire at 0.5 percent.
The only few exceptions were Leicestershire which saw a price rise of 0.8 percent, and a few areas like east London and the West Midlands where house prices rose 0.1 percent.
The research firm’s housing economist John Wriglesworth said a crash was as unlikely as a boom. One could expect sluggishness and stability in the short term, he felt.
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