UK house prices take a step back
Property market slows
November 17, 2009
By Jennifer Ryan
UK home sellers reduced asking prices in November for the first time in three months as demand for property dwindled before the Christmas holidays, Rightmove said yesterday.
Average prices fell 1.6 percent to £â 440 (R2.82 million) from October, when they had risen 2.8 percent, the owner of the UK property website said.
Prices have now dropped 6.6 percent from the peak in May last year.
"In all but the most buoyant of markets, home moving comes second to Christmas festivities," said Miles Shipside, Rightmove's commercial director. "While the market has recovered from some dreadful lows, this month's price fall proves that it does not yet have the strength to buck seasonal trends."
The Bank of England said last week that Britain's property market pick-up from the slump might reflect an "unusual" imbalance between demand and supply, which was unlikely to last. Policymakers expanded their bond-purchase plan to £200 billion this month and governor Mervyn King said he had an "open mind" on whether to increase it further to aid the economy.
Asking prices fell the most in the northeastern Yorkshire and Humberside areas, where they dropped 4.4 percent from October, and in the northwest, where they slid 3.8 percent, Rightmove said.
London prices fell 3.1 percent on the month, led by a 5.3 percent decline in Barking and Dagenham. Kensington and Chelsea, the city's most expensive area, was the only one to show an increase. The 3.9 percent gain there put the average price of a home at £1.97 million. Kensington and Chelsea "is favoured by foreign buyers who have benefited from the weakness of the pound", Shipside said.
Last year asking prices in England and Wales declined 2.9 percent in November and fell further in December and January, Rightmove said. Prices have risen in seven of the 10 months since then.
The Bank of England said last week that the outlook for the housing market "will depend, in part, on the supply of mortgage credit". UK mortgage approvals climbed to their highest level for 18 months in September, but loan approvals are still only half what they were when the credit crisis started in September 2007.
A separate report yesterday by the British Chambers of Commerce showed UK companies have found it harder to obtain credit since June as banks withhold loans.
The survey of 400 companies also found 64 percent said their biggest obstacle to growth in the coming years was a lack of demand. - Bloomberg
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