Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Barker Says U.K. Home Prices May ‘Drift a Little’ Lower in 2011

Don't Miss Out —
Follow us on:

Feb. 11 (Bloomberg) -- Former Bank of England policy maker Kate Barker said U.K. house prices may extend their decline this year as Britons’ confidence weakens and banks continue to restrict lending.

“I find it hard to see house prices picking up any time soon,” Barker said in a Bloomberg Television interview recorded late yesterday in London. “My general expectation is they may drift a little bit lower this year. But I wouldn’t be talking about a big fall.”

Home values fell for a fourth month in January after the economic recovery stuttered and consumers faced a lack of mortgage finance, Acadametrics Ltd. said today. While interest rates remain at a record low, banks have curtailed lending to help rebuild balance sheets after the financial crisis, making it harder for potential homebuyers to get mortgages. Home-loan approvals fell in December to the lowest since March 2009.

“It’s pretty clear that transactions are low,” Barker said. “The reason everything is very weak in the housing market at the moment is because the deposit requirements have risen, so we have fewer first-time buyers coming in to market.”

As mortgage lending slumped, the number of houses being built has fallen to its lowest level in decades. That may cause more volatility in property prices if the pace of buyers returning to the market outpaces the supply for sale, she said.

“The worry is that when we move into any period of easier credit conditions, that will feed very quickly into rising prices,” Barker said. “There are going to be concerns about how we manage the housing market much more as we come out of the crisis, in a way, than as we go through the tail end of it.”

Barker, who published reports for the former Labour government on the housing market, stepped down from the Bank of England’s Monetary Policy Committee in May. She served three consecutive three-year terms on the panel.

Related Information and News: Most-read housing stories: {MNI HSNG <GO>} On the U.K. housing market: {TNI HSNG UK <GO>} Top real-estate stories: {TOPR <GO>} Residential real-estate links: {UKRE <GO>} U.K. economic snapshot: {ECST 23 <GO>}

To contact the reporters on this story: Scott Hamilton in London at shamilton8@bloomberg.net; Linda Yueh in London at lyueh@bloomberg.net

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.