U.K. May House Prices Fall for an Eighth Month, Hometrack Says
U.K. home values fell for an eighth month in May and will probably drop further, Hometrack Ltd. said.
The average cost of a residential property in England and Wales slipped 0.5 percent to 172,200 pounds ($341,000), the London-based research company said today in a statement. Prices fell 1.9 percent from a year earlier, the biggest decline since November 2005.
“The `buyers' strike' continues,'' said Richard Donnell, director of research at Hometrack, in a statement. “Pricing looks set to remain under downward pressure over the coming months.''
Bank of England Governor Mervyn King predicted this month that property values are “likely to fall further'' and said there is a risk that the U.K. economy may contract. The construction industry dragged down economic growth to the slowest pace since 2005 in the first quarter and homebuilders are cutting tens of thousands of jobs.
The percentage of sellers' asking prices being achieved slipped to 92.3 percent this month, the lowest since the survey began in 2001, Hometrack said today. Average time on the market increased to 9.8 weeks from 5.8 weeks a year ago.
“The fall in buyer confidence over the last six months has certainly impacted on transaction volumes but we do not believe this is a precursor to a major rise in forced sales and large prices falls,'' Donnell said first cash advance payday loans online.
End of the Boom
HBOS Plc, the U.K.'s biggest mortgage lender, said on May 2 that home values based on agreed transactions fell 0.9 percent from a year earlier, the first drop in more than a decade.
U.K. homebuilders will shrink their workforce as the 19 billion-pound industry grapples with the housing slump, Stewart Baseley, chairman of the Home Builders Federation, said in an interview last week. The rate of economic growth slipped to 0.4 percent in the first quarter from 0.6 percent in the last three months of 2007.
Home buyers are paying more for mortgages after the global credit squeeze prompted lenders to curb lending. U.K. banks increased the cost of home loans with a 5 percent down payment to the highest in more than eight years in April, failing to pass on the Bank of England's three interest-rate cuts since December.
The central bank kept its main rate at 5 percent in May, citing concern about inflation amid record oil prices. Britons should expect “quite a significant slowdown'' in economic growth this year, policy maker Andrew Sentance said on May 22.