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| MONDAY 28TH MARCH 2005 |
 UK
MARKET SHOWS SIGNS OF SPRING GROWTH
The Hometrack March survey of the national housing market reports
a small fall of -0.1%. While it is the ninth consecutive month
that house prices have fallen, it is the smallest decrease
recorded for over six months, and follows a three-month trend
of reducing price falls.
All signs now point to the end of house price deflation with price rises continuing
for the balance of the year. House prices now stand at £162,300, down
from a peak of £167,700 in June last year.
Activity has increased again this month, with sales agreed
rising by 16.5% (35.9% in February’s survey). This
is partly due to a further increase in the number of buyers
registered of 6.2% (28.5% in February’s survey) and
a decrease in the amount of time it takes to sell a property
to 7.4 weeks (7.6 in February’s survey). This is only
the second time that the number of buyers registered with
estate agents has increased since May last year.
With buyers coming back to the market, the discounts that
are being negotiated on asking price have decreased for the
second month running. This month the average sales price
as a percentage of asking price is 93.4% (93.3% in February’s
survey).
22 counties saw price rises or remained static and 35 saw
price falls. The counties at the top end of the scale were
Central London & City (0.8%), Derbyshire (0.8%), North
West London (0.8%), North Wales (0.4%) ad East Riding of
Yorkshire (0.3%). The counties reporting the largest price
falls were Northumberland (-1.0%), South Yorkshire (-0.9%),
Cambridgeshire (-0.9%), North Lincolnshire (-0.8%) and Leicestershire
(-0.8%).
Of the cities, 28 saw price rises or remained static whereas
26 saw price falls. The top five were Derby (1.8%), Bradford
(1.0%), Hull (0.7%), Portsmouth (0.4%) and Manchester (0.3%).
The cities reporting the worst falls were Lincoln (-2.0%),
Cambridge (-2.0%), Gloucester (-1.9%), Plymouth (-1.8%) and
Leicester (-1.5%).
John Wriglesworth, Hometrack’s Housing Economist,
comments: "House price deflation over the past nine
months looks set to end, with house prices remaining broadly
flat this month. An increase in the number of buyers, helping
boost the number of sales agreed, points to a much stronger
market in the coming months. Buyers are no longer getting
the discounts off the asking prices they were earlier in
the year, again suggesting the market is improving."
"Interest rates look set to remain stable over the
months leading up to the May election, and the Chancellor’s
raising of the stamp duty threshold is likely to have helped
restore further buyer confidence. Meanwhile lenders continue
to offer exceedingly competitive mortgage deals on ever higher
multiples of incomes. We are confident that house prices
will start rising over the next few months and we are therefore
raising our 2005 full year house price inflation forecast
from 0% to 3%."
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