U.K. House-Price Index Points to Continued Weakness in January
A U.K. house-price index showed that the property market remained weak last month as an uncertain economic outlook and tight lending conditions hurt demand, according to the Royal Institution of Chartered Surveyors.
The gauge by London-based RICS was unchanged at minus 16 from the previous month, indicating more surveyors saw price declines than gains, it said in a statement today. Still, the measure stayed at a 17-month high as “temporary factors” helped bolster housing activity.
Britain’s economy shrank 0.2 percent in the fourth quarter as rising unemployment, the government’s budget squeeze and the euro-area debt crisis deterred Britons from spending. Property demand may be supported in the coming weeks as Britons move to beat the March expiration of an exemption from stamp duty property-transaction tax for first-time buyers on homes costing less than 250,000 pounds ($394,500), RICS said.
“Many problems with the market still exist and the lack of affordable mortgage finance is still preventing many from getting onto the property ladder,” RICS housing spokesman Michael Newey said in the statement. “Prices are still falling across most parts of the country, but expectations for future prices have become less pessimistic.”
RICS’s index of price expectations for the next three months climbed to minus 15 in January from minus 23 in December, and a gauge of expected sales surged to 24 from 1. Its measure of new buyer enquiries, an indicator of demand, slipped to minus 7 from 2 and a measure of sales per surveyor rose to 15.6 from 15.3.
RICS said the survey “highlights a moderately negative price picture.”
London recorded a price gauge of 37 in January, one of only two out of the 12 regions tracked by RICS to show a reading above zero. The measure for the Wales was the weakest, at minus 54, followed by the West Midlands, at minus 42.
Data today may show that U.K. inflation weakened to a 14- month low in January. Consumer prices gained an annual 3.6 percent after a 4.2 percent gain in December, according to the median forecast of 36 economists surveyed by Bloomberg News.
Policy makers, who forecast that consumer-price gains will slow this year to below their goal, are pumping another 50 billion pounds into the economy after saying on Feb. 9 that the outlook remains weak. The Office for National Statistics in London will publish the inflation data at 9:30 a.m. in London.
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