House price rises have been easing steadily since February this year. There are other signs that the market is slowing.
•New buyers have dropped by 0.6% reversing a previous rising trend. Hometrack’s unique
National Demand Index™ has consequently recorded falls in excess demand for the first time since Christmas .
•Average sales price achieved as a percentage of asking price fell to 96.2% (May 96.4%).
This ratio had previously been rising, more or less steadily, over the last 12 months (from a low of 94.3% in June last year).
•The average time taken to sell a property has risen to 4.2 weeks (4.0 in May’s survey), the Notwithstanding the slowdown, house prices continue to rise across the whole country with all counties reporting rises except for Oxfordshire (-0.7%). The highest rises were seen in Suffolk (0.9%), Buckinghamshire (0.8%), Greater Manchester (0.8%), Devon (0.8%) and North London City hotspots this month were headed by Ipswich, which recorded increases of 2.4%, followed by Middlesborough (2.1%), Cardiff (1.6%), Milton Keynes (1.3%) and Manchester (1%). Meanwhile,
Oxford itself also suffered this month, recording house price falls of -1.4%. Other areas recording falling property values included Croydon (-0.2%) and Warwick (-0.1%) while Winchester, Guildford and Bournemouth all saw static prices .
John Wriglesworth, Hometrack’s Housing Economist, comments: “While house prices are continuing to rise, there are the first signs that the market may be easing.
New buyers have reduced and excess demand has fallen for the first time this year. With the effects of the recent interest rate rise still to feed through, it looks like the market will continue to
slow this year. However, we are maintaining our forecast of 8% house price rises for 2004, with a further slowdown to 4% in 2005.
“Speculation of a pending housing market crash has no foundation. Interest rates still remain historically low, unemployment remains at a record low and incomes are rising strongly.
Meanwhile lenders continue to compete vigorously for new business with exceptionally attractive mortgage offers. All the signs suggest that we are heading for a soft landing after the heavy price rises of recent years.”
