U.K. Home Sellers Cut Property Asking Prices in December, Rightmove Says
Average asking prices in England and Wales fell 2.7 percent from November to 225,766 pounds ($350,400), the operator of Britain’s biggest property website (RMV) said in a report in London today. On the year, prices rose 1.5 percent, and Rightmove said values may rise 2 percent in 2012, supported by a shortage of property for sale.
U.K. housing demand may remain under pressure as unemployment climbs to a 17-year high and the turmoil in Europe threatens to push the economy back into recession. Still, there won’t be a glut of sellers to undermine values, Rightmove said. It forecasts that about 1.2 million homes will be marketed for sale next year, a third of the amount available before the credit crisis hit in 2007.
“We have had a few years of testing the resilience of the bottom of the market,” Miles Shipside, commercial director of Rightmove, said in a statement. “There remains a high level of uncertainty overhanging the market due to the ongoing euro-zone crisis.”
Eight of 10 regions in England and Wales tracked by Rightmove posted declines last month, led by a 6.2 percent drop in the South East. The North rose 0.9 percent.
Prices in London dropped 2.2 percent on the month, led by a 4.6 percent decline in both Brent and Croydon, and a 3.9 percent drop in Islington. Hounslow’s 4.5 percent increase was the biggest for London. Average prices in the capital were up 6.4 percent on the year, the most for any U.K. region.
The annual price gain for England and Wales is “perhaps a surprising performance given the challenging market,” Rightmove said. Though “2012 will be similarly challenging,” fewer homes for sale “will help underpin prices and stave off a price collapse.”
Unemployment as measured by International Labour Organization standards rose in the three months through October to 2.64 million, the most since 1994. Consumer confidence fell to a record low in October, Nationwide Building Society said last month.
Assessments of the outlook for selling prices point to little growth. Lloyds Banking Group Plc’s Halifax division said last week house prices will rise or fall by no more than 2 percent next year, as the market for residential property is torn between depressed demand and a shortage of supply.
The Centre for Economics and Business Research cut its forecast for 2012 home-price inflation last month to 1.6 percent from 2.4 percent, and said a shortage of properties will help push up values “only slowly.”
“In the event of a disorderly collapse of the euro zone then our predictions for 2012 will also be derailed,” Shipside said.
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