UK home sellers cut asking prices 1.6% in Nov

UK home sellers reduced asking prices in November for the first time in three months as demand for property dwindled before the Christmas holidays, Rightmove Plc said.

Average prices fell 1.6 per cent to £226,440 from October, when they rose 2.8 per cent, the owner of the UK’s biggest residential property website said in a statement yesterday. Prices have now dropped 6.6 per cent from the peak in May 2008.

‘In all but the most buoyant of markets, home moving comes second to Christmas festivities,’ Miles Shipside, Rightmove’s commercial director, said in the statement.

‘While the market has recovered from some dreadful lows, this month’s price fall proves that it does not yet have the strength to buck seasonal trends.’

Britain’s property-market pickup from the slump may reflect an ‘unusual’ imbalance between demand and supply which is unlikely to last, the Bank of England said last week.

Policymakers expanded their bond-purchase plan to £200 billion (S$462 billion) this month and Bank of England governor Mervyn King says he has an ‘open mind’ on whether to increase it further to aid the economy.

The pound was little changed against the US dollar yesterday, trading at US$1.6713 as of 9:10am here.

Asking prices fell the most in the Yorkshire and Humberside area, where they dropped 4.4 per cent from October, and in the North West, where they slid 3.8 per cent, Rightmove said.

London prices fell 3.1 per cent on the month, led by a 5.3 per cent decline in Barking and Dagenham.

Kensington and Chelsea, the city’s most expensive area, was the only one to show an increase. The 3.9 per cent gain there put the average price of a home at £1.97 million.

Kensington and Chelsea ‘is favoured by foreign buyers who have benefited from the weakness of the pound’, Mr Shipside said.

Last year, asking prices in England and Wales fell 2.9 per cent in November and declined further in December and January, according to Rightmove. Prices have risen in seven of the 10 months since then.

The Bank of England said last week that the outlook for the housing market ‘will depend, in part, on the supply of mortgage credit’.

UK mortgage approvals climbed to their highest level for 18 months in September. Loan approvals are still only half what they were when the credit crisis started in September 2007.

A separate report yesterday by the British Chambers of Commerce showed UK companies have found it harder to obtain credit since June as banks withhold loans.

The survey of 400 companies also found 64 per cent of them said their biggest obstacle to growth in the coming years was a lack of demand.

Source: Business Times, 17 Nov 2009