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Just 1 In 9 Areas Still Rising

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House prices rise in just 11% of areas

By Simon Lambert

28 June 2010

The property market recovery is stalling as demand from new buyers slips, according to the latest figures from Hometrack.

It said that average house prices inched up by 0.1% in June, but house prices were now rising in just 11% of postcodes – down from 25% four months ago.

Hometrack says that demand for homes is now being outpaced by supply, but with transactions still continuing to slowly pick up, estate agents were not encouraging sellers to reduce prices.

The monthly report from the property information specialist said that estate agents across England and Wales reported a 0.1% rise in new buyers registering, but the number of properties coming up for sale had increased by 2.9%.

Hometrack's director of research, Richard Donnell, said: 'The growing supply/demand imbalance spans the country and under normal market conditions this would typically result in a downward pressure on prices.

'However, very low transaction volumes are exacerbating the scarcity of housing for sale and this is acting as a support to prices.

'Despite our view that demand is set to weaken in the coming months, price falls are only likely to feed through once sales volumes start to fall back. It is when this point is reached that prices will need to adjust to a level where volumes can be maintained.

'The reality is that the scale of any price falls is likely to be limited --particularly in the current low volume market.'

The average home in England and Wales now costs £158,900, according to Hometrack, up 2.1% annually.

It bases its monthly report on figures from 1,500 estate agents and regularly delivers lower housing inflation results than mortgage lenders' surveys and the Land Registry.

The most recent Halifax and Nationwide reports, based on mortgage figures, had prices up 6.9% and 9.8% in the year to May, respectively, while the Land Registry said prices rose by 8.5% in the year to April.

The report said that buyers are paying on average 94.3% of a property's asking price and new homes coming onto the market are taking 8.4 weeks to sell.

Looking further ahead, Hometrack said that the outlook for house prices was stormy thanks to the impact of eventual interest rate rises on affordability and the household budgets of homeowners.

Mr Donnell said: 'In a low interest rate environment, scarcity and low turnover can support prices in the short term, but higher rates are likely to be the catalyst for a material change in housing market conditions.'

Gotta love the picture caption:

Tipping point: Supply is starting to outstrip demand in the property market, says Hometrack
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I hope the sheeple read the whole sentence, not just the beginning :rolleyes:

Equally I hope the HPC sheeple aren't being overly optimistic about the prospects of the return of crash speed.. otherwise many I fear are going to feel a little let down when they don't get their clear,can't lose buying opportunity.

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