UK House Prices Fall 7.3% Y-O-Y In October

Source : The Business Times, October 28, 2008

(LONDON) English and Welsh house prices fell by 7.3 per cent in the year to October, with the pace of decline accelerating to take prices back to their lowest since March 2006, property consultancy Hometrack said yesterday.

Average house prices fell by 1.3 per cent to £163,200 in Hometrack's October survey, faster than the one per cent drop recorded in September.

Forecasters from London's Centre for Economics and Business Research predicted in a separate report yesterday that British house prices would fall by 25 per cent from their peak in the third quarter of 2007 to a likely trough at the end of 2009. This would take property prices to below 2004 levels.

The downturn in property prices - which have doubled since the start of the decade - is both a consequence and a cause of the economic gloom settling on Britain, where two-thirds of households own their own home.

Official data released last week showed that the British economy shrank for the first time in 16 years between July and September, contracting 0.5 per cent, and British Prime Minister Gordon Brown has warned that the country risks recession.

'The outlook for demand is set to remain weak as consumers focus their attention on the economy,' said Richard Donnell, Hometrack's director of research.

'The expectation of a forthcoming recession and rising unemployment will further undermine demand for housing and continued price falls are inevitable in the months ahead.'

Homes took an average of 11.9 weeks to sell, up from 11.5 weeks in September, and buyers paid just 89 per cent of sellers' asking prices, down from 90 per cent last month. - Reuters