U.K. house prices fell for a fourth month in October and a property-market recovery is unlikely without sustained economic growth, Hometrack Ltd. said.
Prices declined 0.1 percent from September and 0.4 percent from a year earlier, the London-based property research group said in an e-mailed statement today. The annual decline was the smallest in two years. Sales jumped 9.2 percent as prices of old housing stock were lowered, it said.
While data on Oct. 25 showed the U.K. exited recession in the third quarter, Bank of England Governor Mervyn King said last week that the recovery is “slow and uncertain.” Lending growth remains subdued, with mortgage figures later today forecast to show approvals staying at less than half their pre-crisis average.
“The foundation of any national and sustainable recovery in the housing market rests on growth in the wider economy and household incomes,” Richard Donnell, Hometrack’s director of research, said in the statement. Demand for homes is “likely to slow down in the run-up to the year-end with agents looking to push through as many sales as possible.”
A measure of demand for homes increased 0.3 percent in October from the previous month, boosted by a 3.9 percent surge in London, the report showed. The number of homes being put on the market rose 1.4 percent.
U.K. mortgage approvals probably rose to 48,700 in September from 47,665 in August, economists said in a survey before a Bank of England report today. That compares with an average of about 103,000 in the decade through 2007.
The central bank is trying to boost credit growth with its Funding for Lending program, which began in August, and a house-price survey today said property pessimism has eased. Rightmove Plc showed the proportion of people forecasting higher prices in 12 months rose to 29 percent from 22 percent a year ago.
In a separate report, Lloyds Bank said an index of U.K. company optimism rose to 17 in October, the highest in six months, from 10 in September. Still, a gauge of expectations for trading prospects fell to 26 from 43, the lowest level this year. The bank surveyed 300 companies with sales exceeding 1 million pounds ($1.6 million) from Oct. 1 to Oct. 15.
-- Editors: Fergal O’Brien, Eddie Buckle