Hometrack warns against optimism
Housing market information agency Hometrack has warned against optimism despite recording the lowest monthly price fall for a year.
Its figures show house prices fell 0.3 per cent across England and Wales during April, compared with a 0.6 per cent fall in March, and a 0.8 per cent fall in February. It puts the annual decline at 10.1 per cent.
Hometrack’s director of research, Richard Donnell, warned that the slowing decline could be down to seasonal trends. He also said an increase in activity is being driven by buyers of family homes and investors.
‘The market cannot operate indefinitely with just one sub-set of active buyers,’ he said.
‘In the rush to seek out the green shoots of recovery, the importance of first-time buyers in driving the market is often underestimated. And the fact remains that the majority remain affordability constrained and unable to access mortgage finance.
‘Only when first-time buyers feel confident to enter the market in significant numbers can we really start to claim any “real” green shoots of recovery. This suggests to us that the recent pick up in demand is largely seasonal and unlikely to be sustained over the rest of the year.’
Hometrack said it expected to see 600,000 open market sales in 2009, but would expect between 1 and 3 million in a ‘normal’ market.
Mr Donnell added that last week’s Budget had done little to improve the prospect of imminent housing market recovery.
‘The Budget offered little real hope for the housing market and in highlighting the scale of pressure on public finances in the years to come, re-confirms the continuing economic uncertainty to homeowners.
‘As a result demand is set to remain constrained and we expect to see small monthly price falls over the rest of 2009 and into 2010.’