U.K. Home-Price Index Falls to Lowest in a Year as Sales Decline
The price gauge fell to minus 24 from minus 22 in June, London-based RICS said in a report today, citing a monthly poll of property surveyors. A reading below zero means more surveyors saw price drops than gains last month. Measures of newly agreed sales dropped to a four-year low.
The property market is under pressure as banks curtailing access to finance and the continuing recession deter prospective buyers. The Bank of England started a program this month to boost the flow of credit as it continued its bond-purchase program aimed at sparking a recovery.
“The outlook for the next three months remains broadly unchanged,” RICS said in the statement. “The longer-term 12- month outlook shows a marked deterioration, with both price and sales expectations now negative.”
RICS’s measure of newly agreed sales fell to minus 20 in July from minus 13 in June, and a gauge of new instructions to sell property dropped to minus 15 from minus 12. Some surveyors said the market was affected by the London 2012 Olympics, which started at the end of the month.
“A combination of summer holidays and Olympics has meant that activity has slowed,” James Gubbins, a real-estate agent in the Westminster area of London, said in the statement.
A gauge of three-month sales expectations rose to 14 from 11, while a measure of price expectations for the period dropped to minus 23 from minus 18. A measure of the price outlook for the next year also declined, to minus 24.
The only region tracked by RICS to show an increase in prices over the last three months was London, at 18. Northern Ireland was the worst performer, at minus 68.
Britain’s economy has contracted for the past three quarters, and Bank of England Governor Mervyn King wrote in a newspaper article published on Aug. 12 that while the Olympics may boost confidence, they “cannot alter the underlying economic situation” as the euro-area debt crisis drags on.
The central bank held its bond-purchase program at 375 billion pounds ($588 billion) this month, and left its key interest rate at a record low of 0.5 percent. Minutes of the decision will be published at 9:30 a.m. in London tomorrow.
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