U.K. House Prices Rise and Sales Slip in ‘Flat’ Market, Acadametrics Says
U.K. house prices increased in October and transaction levels slipped in a “flat” property market, Acadametrics Ltd. and LSL Property Services Plc said.
The average price of a home in England and Wales rose 0.2 percent from September to 220,056 pounds ($349,900), the groups estimated in an e-mailed report in London today. The number of transactions fell 5.7 percent. In London, prices rose an annual 2.5 percent in the three months through October.
“With a slowing economy, squeezed real incomes and high inflation, there can be little expectation of any rapid recovery in the housing market,” Acadametrics Chairman Peter Williams said. “There is a great deal of uncertainty but the simple fact is that there is a growing population and a shortage of housing supply -- an imbalance which will underpin property values into the future.”
Britain’s economy is at risk of slipping back into recession as the euro-area crisis intensifies. The Bank of England kept its target for bond purchases unchanged yesterday after increasing it in October, and the European Commission said a contraction in at least one quarter “cannot be ruled out.”
In a separate report, the Confederation of British Industry said the government needs to help boost housing activity. This could include introducing a mortgage indemnity guarantee to enable first-time homebuyers to secure low-interest mortgages or allowing them to access their pension funds to boost their deposits on houses.
Out of the 10 regions in England and Wales tracked by Acadametrics, all apart from London saw their average values decline in the past three months compared with a year earlier. Values in the capital rose 0.4 percent in September, the month with the latest available regional data, after increasing 1.6 percent in August.
Nationally, house prices fell an annual 1.3 percent in October. Outside London, the decline was 2.7 percent Acadametrics said.
“The strength of London’s economy combined with a massive influx of foreign investors, caused primarily by the Arab Spring and the euro-zone crisis, has pushed the capital’s prices in the opposite direction to those in the rest of the country,” Richard Sexton, a director at property-appraisal business e.surv Ltd., part of LSL, said in the report.
Acadametrics and LSL combine initial transaction data from the U.K. Land Registry and results from other price measures for their index of values.
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