UK House Prices Fall For 5th Month In A Row

Source : The Business Times, February 26, 2008

House prices in England and Wales fell for a fifth month running in February, pushing the annual rate of inflation to its lowest since April 2006, a survey showed yesterday. However, there were also signs of improving demand, with new buyer registrations rising for the first time since last summer.

Housing market research company Hometrack said house prices fell by 0.2 per cent this month to stand 1.4 per cent higher than in February 2007. In January, house prices fell by 0.3 per cent to stand 2.3 per cent higher in annual terms. The figures are not adjusted to take seasonal factors into account.

The average time taken to sell a property held steady at 8.5 weeks - jointly the longest period since the survey began in 2001. However, a near 8 per cent rise in new buyers registering with estate agents painted a slightly brighter picture. The biggest increase in demand was here where new buyer registrations rose by 13 per cent.

'In the wake of the credit crunch, demand for housing fell by 45 per cent, but the latest Hometrack survey shows a small yet important turnaround in demand over February,' said Richard Donnell, Hometrack's director of research.

'The modest increase in new buyer registrations is evidence of firming demand, largely on the back of recent interest rate cuts.' The Bank of England has cut rates twice in the past three months, bringing them down to 5.25 per cent. Money markets show investors are betting rates will come down at least as far as 4.75 per cent by the end of the year. -- Reuters