U.K. Home Prices Stop Falling for First Time in 10 Months on Demand Pickup

U.K. house prices stopped falling in April for the first time in 10 months as demand for homes picked up, Hometrack Ltd. said.

The average cost of a home was unchanged from March at 153,100 pounds ($255,000), the London-based property researcher said in an e-mailed report today. Prices in London climbed 0.3 percent. Demand as measured by prospective buyers registering with realtors has risen 22 percent so far this year.

“This has eased the downward pressure on house prices, which have been supported by a recent tightening in available supply,” Hometrack’s director of research, Richard Donnell, said in the report. “The second half of 2011 is likely to emerge as a new phase where rising supply will constrain any further improvement in pricing levels.”

Recent housing-market data have been mixed as a lack of supply props up home values while restricted mortgage lending and the deepest government spending cuts since World War II deter buyers. Britain’s economy grew 0.5 percent in the first quarter, barely enough to erase the contraction in the final three months of last year.

The number of potential buyers registering with real-estate agents climbed by 2.8 percent in April from March, when it rose 4.2 percent, Hometrack said. Agents reported an 8 percent increase in agreed sales, compared with 12.6 percent the previous month.

Rightmove Plc said last week that only one in four Britons now forecast a decline in house prices over the next 12 months, compared with one in three in the previous quarter.

A separate report by Lloyds TSB today showed that the number of properties sold last year for 1 million pounds or more rose to 7,185, 54 percent more than in 2009.

To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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