U.K. Home Prices Fall for First Time This Year, Hometrack Says
U.K. house prices fell in July for the first time this year and may extend their decline as a deepening recession curbs demand for homes, Hometrack Ltd. said.
Values slipped 0.1 percent from June, when they stagnated, the London-based property-research company said in a report today. A measure of demand fell the most in six months. In London, the pace of home-price inflation slowed to 0.1 percent.
Data this week showed Britain’s economy shrank 0.7 percent in the second quarter, the most in more than three years, while Chancellor of the Exchequer George Osborne said there are “deep-rooted economic problems.” At the same time, the euro- area debt crisis is mounting, with speculation increasing that Spain may need a full sovereign bailout.
“Weaker demand is to be expected over the summer months, but compared to previous years, the seasonal slowdown has started earlier and developed more rapidly,” said Richard Donnell, director of research at Hometrack. “This reflects growing concern over the U.K.’s economy and the deepening euro- zone crisis.”
Compared with June, prices fell in eight out of 10 regions tracked by Hometrack and were unchanged in one, according to the report. London was the only region to register an increase. From a year earlier, values nationally fell 0.5 percent.
The number of new buyer registrations, a measure of demand, dropped 2.1 percent in July from the previous month, while the volume of properties being put up for sale rose 1.4 percent. Donnell said the gap between supply and demand “is set to widen over the summer months and points to further modest price falls.”
In London, new buyer numbers fell 2.4 percent in July, with the greatest decline, 3.4 percent, recorded in Southeast England.
“The housing markets of London and the Southeast -- areas that have supported headline price growth since the beginning of the year -- are starting to slow as demand weakens and supply rises,” Hometrack said.
A separate survey today by Lloyds Bank showed U.K. companies became less pessimistic about the economic outlook in July. The index of sentiment rose to minus 8 from minus 12 in June, the unit of Lloyds Banking Group Plc (LLOY) said. Still, hiring intentions fell to the weakest level this year and confidence “remains relatively weak by historical standards,” it said.
The bank questioned 305 companies with sales exceeding 1 million pounds ($1.57 million) between July 2 and July 12.
PricewaterhouseCoopers LLP said today that U.K. insolvencies in the retail industry rose 10 percent in the second quarter compared with a year earlier. Overall insolvencies fell 11 percent to 3,927, it said.
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