U.K. House Prices Decline as Banks See Government Cuts Restraining Demand
U.K. House Prices Slip 0.1%, Acadametrics Says
Jason Alden/Bloomberg
The average price of a home in England and Wales declined 0.1 percent from February to 222,146 pounds ($362,700).
The average price of a home in England and Wales declined 0.1 percent from February to 222,146 pounds ($362,700). Photographer: Jason Alden/Bloomberg
U.K. house prices fell in March as banks reported weakening demand, research company Acadametrics Ltd. and LSL Property Services Plc said.
The average price of a home in England and Wales declined 0.1 percent from February to 222,146 pounds ($362,700), the groups estimated in an e-mailed report in London today. From a year earlier, values were unchanged.
Recent housing data have been mixed, with constrained bank lending limiting demand and a lack of housing supply supporting values. The Bank of England held its benchmark interest rate at a record low of 0.5 percent yesterday, as the threat to the recovery from the government’s budget squeeze takes precedence over faster-that-targeted inflation.
“There is some evidence to suggest wider housing-market conditions are easing a little,” Peter Williams, chairman of Acadametrics, said in the report. “Lenders are now reporting a lack of demand, which is probably unsurprising given very low consumer confidence and concerns about the impact of forthcoming expenditure cuts, joblessness and taxation rises.”
U.K mortgage approvals gained 4.3 percent to 48,979 last month, the highest level since May, property-appraisal business e.surv Ltd., part of LSL, said in a separate report today. That’s still only about half the average level recorded over the last decade.
Lloyds Banking Group Plc (LLOY)’s Halifax unit earlier this week reported that home values slipped 0.1 percent in March and said uncertainty over the economy is “likely to constrain housing demand, resulting in some modest downward pressure on prices.” It sees home prices falling 2 percent this year.
London Gain
Out of the 10 regions Acadametrics and LSL track, all apart from London and southeast England posted declines in the past three months compared with a year earlier. Prices in the capital rose 3.7 percent in the period.
“The static national figures conceal a much more dynamic picture in the regions,” said David Newnes, estate agency managing director of LSL. “The north of England and Wales have seen significant price falls. Lenders are especially worried about the effect government spending cuts will have on unemployment in areas where a large proportion of workers are employed by the state, and this is holding back demand.”
The number of transactions rose about 30 percent in March from the previous month, driven by a seasonal upturn and wealthy homebuyers bringing forward purchases valued at more than 1 million pounds to beat an increase in stamp duty this month, Acadametrics and LSL said. From a year earlier, transactions were 6 percent higher.
Acadametrics and LSL combine initial housing transaction data from the U.K. Land Registry and results from other price measures to produce an estimate for the most recent month. That number is then revised in following months.
To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
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