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U.k. House Prices Decline To Lowest Level In 17 Months

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http://www.bloomberg.com/news/2011-07-07/u-k-house-prices-fall-to-lowest-in-17-months-acadametrics-says.html

U.K. house prices dropped for a third month in June to their lowest level in 1 1/2 years as a purchase-tax increase and a lack of mortgage finance deterred buyers, Acadametrics Ltd. and LSL Property Services Plc said.

The average price of a home in England and Wales fell 0.8 percent to 219,365 pounds ($350,500) from May, when it also decreased 0.8 percent, the groups said in an e-mailed report in London today. Prices fell 1.4 percent from a year earlier.

The decline partly reflected a drop in demand for homes worth more than 1 million pounds after the government raised stamp duty, a property-transfer tax, in April to help tackle the budget deficit. The housing market may struggle to gain momentum this year as banks restrict lending and inflation outpaces growth in wages.

“The modest gains in house prices over the last 18 months have disappeared,” Peter Williams, chairman of Acadametrics, said in the report. “A significant squeeze on household budgets is under way given high inflation, rising taxation and falling real incomes. If the economy’s growth slows as many expect, these pressures will intensify.”

Out of the 10 regions tracked, eight posted falls in the past three months compared with a year earlier. Prices in northwest England led declines with a 4.8 percent drop, while London posted a 5 percent gain. In May, values in the capital decreased 1.4 percent on the month.

“Putting the fall down solely to high-value homes would ignore the weakness in the present market,” said David Newnes, managing director of LSL. The regional declines in the past three months indicate “the impact of the continuing shortage of mortgage finance,” he said.

The Bank of England kept its benchmark interest rate at a record low of 0.5 percent yesterday as the threat to the recovery took precedence over an inflation rate that is more than double the central bank’s 2 percent goal.

Acadametrics and LSL estimate the number of transactions in June rose 20 percent to 61,000 from an “unusually low” May.

The groups combine initial transaction data from the U.K. Land Registry and results from other price measures for an estimate for the most recent month.

They obviously didn't take the Halifax figure into account when making the latest guess.

Edited by Pent Up

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I don't suppose we can expect to see this as front page news in tomorrow's Daily Express? :unsure:

I did a search on their website for "house prices". Amazingly, a lot of the articles that came up were quite bearish.

The BBC were barking on this morning about the period of reflection that other tabloids were now going through re the NotW hackings. We saw yesterday that when it comes to their front page and house prices, the Express still isn't going to miss an opportunity though. Personally, I think it was a daft move from them because it really made their property ramping stand out and look even less credible than it already does.

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“A significant squeeze on household budgets is under way given high inflation, rising taxation and falling real incomes."

There's the meat, the rest is just the vegetables, which a lot of people are going to be stuck with.

Edited by OnlyMe

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“A significant squeeze on household budgets is under way given high inflation, rising taxation and falling real incomes."

There's the meat, the rest is just the vegetables, which a lot of people are going to be stuck with.

This is why I for one am not rushing back into this zombie housing market, although that may change if wages start to fly up.

Since Merv's answer to everything is a printing press then people are going to get poorer and poorer and have less money to waste on bricks and mortar.

Now the Govt. tax take is sinking through the floor things should get really interesting. Thumb screws all round.

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Link to report:

http://www.acadametrics.co.uk/LSL%20Acad%20HPI%20News%20Release%20June%2011.pdf

I see they've been up to their magic tricks again.

Prices fell -0.8 in June, but the May release has also been revised down to -0.8 and the April one to -0.4.

I note this very bullish comment:

The annual price falls outside London and the South East are beginning to increase demand as the affordability of properties improves, which will begin to put a brake on the fall in prices nationally.

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Interesting one here:

“A report by the LV= (Liverpool Victoria) Insurance has forecast that, by 2025, the average age of first time buyers will be 41, up from 38 today, with all the wider consequences that this has in terms of family formation. The recent Halifax Generation Rent report highlighted the pessimism of younger households about buying a home. In combination with the ONS figures, these underline the serious pressures that are building. The Government is due to hold another first time buyers’ summit and we can anticipate further announcements by both government and industry in support of the market. Will such measures, alongside a restored mortgage supply and flat or falling prices, be enough over the medium term to restore affordability and a ‘normal’ functioning market? Probably not; but without doubt the current challenges are considerable and building.”

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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