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| MONDAY 24TH OCTOBER 2005 |
 UK
HOUSE PRICES CONTINUE 16 MONTH FALL
House prices fell for the sixteenth consecutive month as supply
continues to exceed demand, according to the Hometrack October survey of
the national housing market out today.
The report shows a further fall of -0.1% making the 16th consecutive
month of house price falls. The national average house price now stands
at £160,700, down from a peak of £167,700 in June 2004 and
down over 3.5% in the past 12 months.
The number of buyers registering with estate agents has increased by
2.1% this month, bringing the total increase in buyers this year to over
22%. More buyers in the market and a greater level of confidence has
resulted in an increase in activity of 5.9% this month (+15.5% over the
past 3 months).
John Wriglesworth, Hometrack’s housing economist, said, "The
key feature of the market this month is a significant increase in house
sales activity, helped by more buyers returning to the market. However,
the number of houses for sale has also increased and as a result, excess
supply continues to plague the market."
Sales price as a percentage of asking price has decreased slightly to
93.1% this month (93.2% in September’s survey), indicating that
it is still very much a buyers’ market. Buyers are continuing to
negotiate large discounts off asking price, and have greater bargaining
power.
The time taken to sell a house has decreased a touch to 8 weeks this
month (8.1 weeks in September’s survey), but is still much higher
compared with October 2004 when it took an average of 6.5 weeks to sell
a property. The number of viewings per sale has also decreased this month
to an average of 12 (12.4 in September’s survey). With more buyers
in the market, houses are not sticking as long.
Of all the counties, only one has seen price rises this month, 24 have
remained static and 32 have seen price falls. Lancashire has seen price
rises of 0.1%, while Cambridgeshire, Leicestershire and Suffolk were
among the counties remaining static. The counties reporting the worst
price falls this month are Wiltshire (-0.5%), West Midlands (-0.3%),
South Yorkshire (-0.3), and Nottinghamshire (-0.3%).
Of the cities, 2 have seen price rises, 37 have remained static and
15 have seen price falls. The cities reporting the price rises are Leeds
(0.2%) and Liverpool (0.1%), while Bath, Bristol and Lincoln are among
the cities remaining static. The cities reporting the largest falls are
Salisbury (-1.9%), Taunton (-0.4%), Nottingham (-0.4%) and Manchester
(-0.4%).
John Wriglesworth continued: "Vendors have been painfully slow
adjusting their asking prices to market clearing levels and this is prolonging
the pain of excess supply in the market. Future house price falls are
inevitable over the next few months despite transactions improving."
"Annual house price deflation this year looks set to be around
-4%. However, 2006 should see a recovery, as rising household incomes
should help improve house purchase affordability. Baring interest rate
rises or significant jumps in unemployment, a robust, if not exceptional,
house prices should resume their upward path before the middle of next
year."
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