Jan. 13 (Bloomberg) -- U.K. house prices rose to an eight-month high in December as homebuyers rushed to complete their purchases before the end of the year and demand from investors increased, Acadametrics Ltd. and LSL Property Services Plc said.
The average price of a home in England and Wales rose 0.2 percent from November to 220,385 pounds ($338,000), the groups said in an e-mailed report in London today. Transactions rose 3 percent. From a year earlier, values were down 0.5 percent.
“We have experienced a period of relative stability in house prices, which is perhaps surprising given the turmoil observed in the financial markets,” Acadametrics Chairman Peter Williams said in the report. This year “seems likely to be a repeat, with uncertainty, once again, dominating the picture.”
The U.K. economy barely grew in the fourth quarter, according to the National Institute of Economic and Social Research, while rising unemployment and the euro-area debt crisis are undermining consumer confidence and property demand. Banks expect to toughen lending terms because of strains in funding markets, making it harder to get mortgages.
In a separate report, a U.K. output index declined in December for a seventh month, “pointing to a growing risk of a return to contraction,” accountancy firm BDO LLP said. The gauge estimating output over the coming three months dropped to 91.4, the lowest since April 2009, from 92.5 in November. Readings below 95 indicate contraction.
Out of the 10 regions in England and Wales tracked by Acadametrics, all apart from London and Wales saw their average values decline in the past three months compared with a year earlier. Values in the capital rose 0.2 percent in November, according to the latest available regional data, after increasing 0.5 percent in October.
The number of transactions probably gained 3 percent to 59,150 in December from the previous month, with purchasers “keen to complete the transaction move prior to the New Year,” Acadametrics and LSL said. The number of properties sold rose 3.6 percent in the August-December period compared with a year earlier as demand from buy-to-let investors increased, they said.
“The housing market has on balance performed well compared to the economy as a whole,” Williams said. “It has shown considerable resilience and subject to any sharp rise in interest rates or unemployment, or falls in income, it looks likely that it could continue along this path in 2012.”
Transactions in 2011 may have fallen 2.1 percent to 650,000 from a year earlier, the groups said. That compares with an annual average of 1.07 million in the previous 16 years, they 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.
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