House prices flat as supply falls further

A LACK of supply in the housing market has kept house prices from falling, according to new figures released today.<br /><br />According to housing information provider Hometrack&rsquo;s monthly national housing survey, prices remained flat in June compared to May, although they are still down 8.7 per cent from last year.<br /><br />But slow growth in the availability of housing, coupled with rising sales volumes and increased demand, appears to have arrested the long-term downward trend in house prices.<br /><br />The volume of buyers has grown by 36 per cent in the past six months, compared to a 6.4 per cent increase in the number of homes for sale, while in London an increase in demand of 52 per cent outstripped the rise in supply of 5.6 per cent, nearly 10 times.<br /><br />Richard Donnell, director of research at Hometrack, said: &ldquo;The jury is still out as to whether the momentum gained over the spring and early summer can be maintained for the rest of the year.&rdquo;<br /><br />&ldquo;The two key risks for the market are either a renewed weakening in demand or a surge in the volume of housing for sale.&rdquo;<br /><br />The gap between supply and demand has seen the average time a house spends on the market fall to 9.4 weeks, off a high of 12 weeks in January.<br /><br />The proportion of the asking price that buyers are prepared to pay has also risen, up for the fourth month in a row, from 88.3 per cent in February to 91 per cent. <br /><br />And new buyer registrations grew by 4.6 per cent, bringing the total increase from the start of the year to 36 per cent, a massive contrast with last year when estate agents reported an 18 per cent fall in the number of homebuyers.<br /><br />Donnell forecast that &ldquo;the lack of housing for sale looks set to remain a continuing theme for the foreseeable future&rdquo;.