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| TUESDAY 24TH MAY 2005 |
 INSIGNIFICANT
FALLS SHOW MARKET IS STABILE
The Hometrack May survey of the national housing market reports
a further fall of -0.1%. This is the eleventh consecutive month
that house prices have fallen.
However, over the last three months house price falls have
only been decreasing at a rate of -0.1% per month, which
suggests that the market is stabilising. Prices now stand
at £161,900, down from a peak of £167,700 in
June last year and down 2.3% over the last 12 months.
In contrast to the ongoing house price malaise, housing
market transactions have seen a further marked improvement.
Sales agreed have risen by 7.6% this month (9.4% in April’s
survey), suggesting that the market is turning the corner.
This increase in activity is mainly due to an increase in
the number of buyers coming back to the market of 2.2% (5.4%
in April’s survey).
However, as the number of new instructions continues to
increase, an oversupply of properties means that it is still
a buyer’s market and prices are still decreasing.
Sales price as a percentage of asking price has increased
slightly this month to 93.6% (93.3% in April’s survey)
indicating that house price deflation has resulted in more
realistic asking prices.
The amount of time it is taking to sell a house has stayed
stable at 7.4 weeks, whereas 12 months ago houses were taking
just 4.1 weeks to sell. Properties are sticking on the market
as buyers have a lot more choice due to the back log of properties
registered with estate agents.
The average number of viewings has slightly increased to
12.5 (12.4 viewings in April’s survey).
19 counties have seen price rises or remained static this
month, and 38 have seen price falls. The counties at the
top end of the scale are Central London & City (0.2%),
London – North (0.2%), Essex (0.1%), London – South
East (0.1%) and Northamptonshire (0.1%). The counties reporting
the largest falls are South Lincolnshire (-1%), Shropshire
(-1%), North Yorkshire (-0.8%), London – North West
(-0.7%) and Derbyshire (-0.5%).
Of the cities, 34 have seen price rises or remained static
whereas 20 have seen price falls. The top five are Hull (0.6%),
Chester (0.3%), Cardiff (0.1%), Exeter (0.1%) and Bath (0%).
The cities reporting the worst falls are Shrewsbury (-3%),
York (-1.3%), Swindon (-1.3%), Lancaster (-1.2%) and Gloucester
(-0.8%).
John Wriglesworth, Hometrack’s Housing Economist,
comments: "House prices are falling like drizzly spring
rain, slowly and over most parts of the country. While there
is no sunny outlook in prospect, there are no signs of a
gathering storm either. The forecast for the next couple
of months looks set to remain dreary."
"On the economic front, however, with new expectations
of lower interest rates and ongoing rising incomes we expect
a mild recovery in the second half of the year. Homes are
still affordable, and mortgage lenders are offering very
competitive deals. All the market needs is a spark of consumer
confidence, which will extinguish misplaced fears of significant
house price falls. The ongoing market malaise has caused
us to revise our house price forecast for 2005 from 3% to
0%. The year looks set to end as it began in terms of house
prices, as flat as a pancake."
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