British Home Prices Hold Their Value, Hometrack Says
Written on July 1, 2009
U.K. houses held their value for a second month in June as increased demand and a lack of supply supported residential prices, Hometrack Ltd. said.
The average cost of a home in England and Wales was 155,600 pounds ($257,000), the London-based property researcher said in an e-mailed statement today. They stopped falling in May on Hometrack’s measure for the first time in 20 months. From a year earlier, values fell 8.7 percent in June.
“A lack of supply and rising demand have combined to prop up house prices in the last two months,” Richard Donnell, director of research at Hometrack, said in the statement. “It is the demand side where the greatest risk lies as many would-be buyers continue to remain cautious or are unable to obtain sufficient equity or finance to access the market.”
Bank of England policy maker Kate Barker said last week the housing market is still “some way away from normal” and the central bank said banks have curbed mortgage lending to all but the safest borrowers. That may hamper a recovery in the economy from its worst recession in a generation.
The number of new buyers has risen by 36 percent in the past six months, outpacing a 6.4 percent gain in the number of properties for sale, Hometrack said unsecured personal loans. It based its survey on 6,160 responses from real-estate agents and property surveyors.
Housing Demand
In London, demand for housing has exceeded the increase in the number of homes on the market tenfold, Donnell said. The increase in buyer registrations across the U.K. was 4.6 percent in June, compared with 6 percent in May, today’s report showed. The number of agreed sales rose 6.4 percent, compared with 9.4 percent the previous month.
Barker, speaking in testimony to Parliament’s Treasury Committee on June 24, said she would “be cautious about the scale of activity in the next year to 18 months.” The central bank said in a report last week that mortgage lending is now “focused almost entirely” on borrowers with clean credit histories.
U.K. home-loan approvals climbed less than economists forecast last month as the credit squeeze led to the smallest increase in net mortgage lending since records began in 1993. Banks granted 43,414 loans in May, compared with 43,191 in April, the Bank of England said today in London.
Filed in: marketing.