U.K. House Prices Fall to Lowest in Six Months on Concerns About Economy

U.K. house prices fell to their lowest level in six months in January as concern increased about the outlook for the economy and the euro-area debt crisis, Acadametrics Ltd. and LSL Property Services Plc said.

The average price of a home in England and Wales fell 0.2 percent from December to 218,992 pounds ($346,840), the groups said in an e-mailed report in London. From a year earlier values fell 1.4 percent, the quickest pace since September.

“Our expectation is of more of the same,” Acadametrics Chairman Peter Williams said in the report. “Much now turns on efforts to re-stimulate the economy, whether through more quantitative easing by the Bank of England or by the government in the March Budget.”

The U.K. economy shrank 0.2 percent in the fourth quarter as rising unemployment and the government’s budget squeeze deterred Britons from spending. The Bank of England said yesterday it will pump another 50 billion pounds into the economy as the growth outlook remains “weak” and threats from the European debt turmoil persist.

Out of the 10 regions tracked by Acadametrics, all apart from London and Wales saw their average values decline on an annual basis in January, according to the survey. Values in the capital rose 3 percent from a year earlier.

Nationally, the number of transactions rose by 5.1 percent to 173,351 in the fourth quarter compared with a year earlier, Acadametrics said. It added that there was an increase in activity in the buy-to-let sector in 2011, leading to an increase in transactions. Still, “the absence of first time buyers, who accounted for up to 50,000 sales per month prior to the credit crunch, is the major factor why transactions have not returned to 2006-2007 levels,” it said.

Acadametrics and LSL combine initial transaction data from the U.K. Land Registry and results from other price measures for their index of values.

To contact the reporter on this story: Colm Heatley in Belfast at cheatley@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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