U.K. house prices dropped for the first time in five months in April as demand weakened after the end of a tax exemption on purchases for first-time buyers, Acadametrics Ltd. and LSL Property Services Plc said.
The average price of a home in England and Wales fell 0.2 percent from March to 220,668 pounds ($357,000), the groups said in an e-mailed report in London today. From a year earlier, values were down 0.7 percent.
The property market is struggling to recover as tight lending conditions, high unemployment and falling consumer confidence undermine demand. Still, Bank of England policy makers halted their stimulus expansion yesterday as inflation risks outweighed concerns about an economy that has succumbed to its first double-dip recession since 1975.
“There is little to suggest that we will see any sharp rise in prices and, with continued tight access to mortgages, demand will remain suppressed,” Acadametrics Chairman Peter Williams said in the report. “The mood seems to have become more negative most recently with some arguing we have seen the best of 2012 already.”
Out of the 10 regions tracked by Acadametrics and LSL, all apart from London and East Midlands saw their average values decline on an annual basis in the three months through March, the latest month with regional data.
Nationwide Building Society said today that its consumer confidence index dropped to 44 in April from 53 in March and may decline further this month. Consumers have also become more pessimistic about the housing market, forecasting a 0.2 percent decline in prices over the next six months.
Demand for property was boosted earlier this year as first-time buyers rushed to beat the end of a tax exemption on some houses in March. Acadametrics and LSL said the number of transactions probably dropped 18 percent in April. They combine initial transaction data from the Land Registry and results from other price measures for their index of values.
Rightmove Plc, the operator of the U.K.’s biggest property website, said in a separate report that one in three people forecast a gain in house prices in the next year, compared with one in four in its previous quarterly survey. The proportion of people predicting an increase was the highest since the third quarter of 2010.
Still, almost half thought prices were overvalued, according to the poll of 41,421 people carried out April 2-16, Rightmove said.