House prices fall for the seventh consecutive month, with no imminent signs of recovery.
However, -0.4% is a smaller reported fall than the previous 3 months. This suggests that house prices may at last be stabilising after over half a year of house price falls. The average property price now stands at £162,800, down from a peak of £167,700 in June this year.
Housing transactions show no signs of a recovery as activity has continued to slow down this month. Agreed sales fell by –13% compared with -3.8% in December’s survey, possibly reflecting the normal seasonal slowdown. Houses are taking 7.7 weeks to sell (7.5 in December’s survey), but the average number of viewings is continuing to decrease and now stands at 12 viewings (12.2 in December’s survey, 12.5 in November’s survey).
Supply continues to exceed demand, with the number of buyers registered with estate agents (demand) falling by -12.8% (-6.5% in December’s survey) and the number of unsold properties listed (supply) decreasing by –4% (+0.1% in December’s survey). Hometrack’s unique National Demand Index has recorded an increase in supply relative to demand for eight consecutive months.
Average sales price as a percentage of asking price is down again this month, to 92.7% (92.9% in December’s survey), and buyers are still negotiating discounts of over 7% of the asking price.
There has been a slight ease on the price falls this month, as four counties remained stable and two reported price rises. The counties at the top end of the scale were North Lincolnshire (0.1%), Warwickshire (0.1%), Central London & City (0.0%), Hereford and Worcester (0.0%), and Suffolk (0.0%). The counties reporting the largest price falls were Avon (-1.3%), West Midlands (-0.9%), Buckinghamshire (-0.9%), Staffordshire (-0.8%) and Somerset (-0.8%).
The cities reporting the worst falls were Chester (-2.0%), Plymouth (-1.8%), Bath (-1.8%), Stoke (-1.3%) and Lancaster (-1.3%). However, 18 out of the 54 listed cities remained stable or reported price rises. The top five were Warwick (0.4%), Middlesborough (0.1%), Blackpool (0.0%), Cambridge (0.0%) and Carlisle (0.0%).
John Wriglesworth, Hometrack’s Housing Economist, comments: “The start of 2005 hasn’t brought much good news on the housing market front. House prices have fallen for seven consecutive months and the volume of sales is markedly down on previous months. We are yet to see signs of improvement. House price decreases have been less than previous months, but it isn’t until June that we are likely to see a recovery with house prices moving upwards.
With interest rates forecast to remain stable and mortgages still relatively cheap, demand should improve by the end of the year. We continue to predict 0.0% house price inflation for 2005.”
