U.K. Home Sellers Seek Record Prices on Supply Shortage: Economy
Asking prices for U.K. homes rose to a record in April as a shortage of property boosted values in London, Rightmove Plc said.
Average asking prices in England and Wales gained 2.9 percent in April to 243,737 pounds ($386,000), the operator of Britain’s biggest property website said in a report published today. Prices in the capital increased 2.1 percent to a record 464,944 pounds.
“This is not a universal signal of a housing-market recovery,” Miles Shipside, commercial director of Rightmove, said in a statement. “Fresh property stock is a bit scarcer this April compared to last, and this is a key factor in providing a price floor for spring prices to springboard from.”
Demand for homes in the capital and the south of England has exceeded supply, helping push up property values. While Britain’s economy has shown signs of recovery in the first quarter, mortgage approvals declined more than forecast in February and a survey by GfK NOP Ltd showed consumer confidence fell in March as the government’s fiscal squeeze hurt incomes.
U.K. economic growth will be 0.4 percent this year, half the official forecast from the government’s fiscal watchdog, and will continue to stall until companies boost investment, Ernst & Young LLP’s ITEM Club said in a report today.
London property prices have risen 14.9 percent since the last peak in prices in May 2008, while prices in the rest of the country fell 4.3 percent in the period, Rightmove said. The increase in value across the country is still less than retail- price inflation over the period. The report also showed 5 percent fewer London properties were put on the market in April than in March.
Risk From Europe
In a separate report today, the Bank of Korea lowered its economic growth forecast for this year as rising bond yields in Spain highlight the threat to Asian exports from Europe’s debt crisis and austerity measures. Gross domestic product will expand 3.5 percent, less than the 3.7 percent estimate in December, the central bank said in a statement.
India may cut benchmark interest rates for the first time in three years as Asia’s second-largest economy slows, a Bloomberg News survey indicates before the central bank’s policy board meets tomorrow. India reported today that inflation slowed to 6.89 percent in March from 6.95 percent in February, according to the wholesale price index that serves as a benchmark gauge.
Spain’s 10-year bond yield climbed 19 basis points last week to 5.98 percent, while similar-maturity Italian yields increased seven basis points to 5.52 percent. The euro declined 0.4 percent to $1.3023 at 10:53 a.m. in London after falling below $1.30 for the first time in two months. The MSCI Asia Pacific Index dropped 0.8 percent.
The euro region’s trade surplus narrowed in February as increased demand for imported goods outpaced exports. The surplus shrank to a seasonally adjusted 3.7 billion euros ($4.8 billion) from a revised 5.3 billion euros in January, the European Union’s statistics office in Luxembourg said today.
The U.S. may report today that retail sales grew at a slower pace. A 0.3 percent rise in retail purchases in the world’s biggest economy in March would follow a 1.1 percent increase in February that was the biggest in five months, according to the median forecast of 71 economists surveyed by Bloomberg News ahead of Commerce Department figures.
Kensington and Chelsea
Rightmove’s report today showed the London districts of Southwark, Sutton, Westminster, Croydon and Ealing recorded the largest monthly increases in asking prices within the capital. The average price in Kensington and Chelsea, the most expensive borough, increased to 2.1 million pounds after breaking the 2 million-pound barrier for the first time last month.
Nationally, all 10 regions of England and Wales tracked by the company showed asking prices gained on the month, led by the southwest with a 5.8 percent increase. From a year earlier, asking prices rose 3.4 percent nationally and gained 7.9 percent in the capital, Rightmove said.
U.K. house prices rose the most in almost three years in March, boosted by demand from first-time buyers before a tax holiday on some property purchases expired last month, Lloyds Banking Group Plc’s Halifax unit said April 4. Prices jumped 2.2 percent from February to an average 163,803 pounds, up 0.8 percent from a year earlier. Rightmove’s report for March showed a 1.6 percent increase in asking prices.
A shortage of homes for sale is also helping drive up rental costs. A separate report today showed that rents in London rose 9.6 percent in 2011, according to Hometrack Ltd.
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