House prices still falling
House prices in England and Wales fell once again in October as the supply of housing continued to outstrip demand in the private sales market
According to the latest housing survey from Hometrack, month-on-month prices fell by 0.2 per cent - an increase from the 0.1 per cent falls in each of the previous five months.
Demand for homes fell by 0.2 per cent, marking the third consecutive month of falling demand. Meanwhile, the supply of properties listed with agents has increased by 11 per cent over the past six months.
In London, prices remained static against September, following seven months of rises. The West Midlands registered a 0.6 per cent drop, with the East Midlands and north east regions seeing prices fall by 0.4 per cent.
‘Growing consumer concern over the outlook for the economy is beginning to impact directly on house prices,’ said Richard Donnell, director of research at Hometrack.
‘Above average price rises in London have flattered the headline rate of growth over recent months and a slowdown in the capital will have a knock-on impact on the scale of price changes nationally in the months ahead.’
The news comes as other research shows that the gap between house prices in London and the rest of the United Kingdom is widening.
Analysis by consultancy CBRE shows that house prices have risen by 24 per cent over the last five years, but the figure falls to just six per cent if London is excluded.
The proportion of new starts which are in London has increased from just under nine per cent to more than 13 per cent in four years, as developers focus more on the capital.
Jennet Siebrits, head of residential research at CBRE, said: ‘It really is a game of two markets at present with London relatively buoyant compared with the rest of the UK.
‘Over the last 15 years, the price differential for apartments in London has increased from 50 to 100 per cent which means that house prices in the capital are now double that of the national average.
‘Overall the UK housing market remains weak but broadly stable. However, risks and uncertainties are increasing as the Eurozone sovereign debt crisis impairs the general economic outlook.’