House prices stagnate as activity stalls

Julian Harris
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<a href="/house-prices">HOUSE prices</a> have stagnated under the weight of economic troubles, according to two separate studies released this morning.

The average price of a British home fell by one per cent in December leaving prices virtually unchanged through last year, as recorded by an aggregate of several price surveys.

And a new report from Hometrack says that a minimal rise in London’s prices in January only slightly offset falls elsewhere in the UK, leaving overall prices unchanged in the first month of the year.

“Given the pressure on household finances and the outlook for the wider economy, we expect only a modest improvement in levels of demand in the coming months,” said Hometrack’s report.

“On a regional basis southern England (excluding London) has seen the biggest decline in demand over the last six months, but this has been from a high base,” it added.

The survey paints a picture of a largely inactive market, with the seasonal dip in both supply and demand continuing into January.

The supply of homes to the market fell by seven per cent over the last six months. “Supply has not contracted to this extent since 2009,” the survey said.

Yet lower supply has not pushed up prices, as demand has also sunk. Between August and January the number of interested buyers registering with agents plummeted by 23 per cent, the survey found.

London will continue to buck the national trend, however, particularly at the top end. Foreign investors will “continue to consider London a safe haven,” Hometrack said.