(LONDON) House prices in England and Wales were flat for a third consecutive month in July, causing the year-on-year decline to slow to 7.7 per cent from 8.7 per cent, property data company Hometrack said yesterday.
But a broad-based recovery in house prices was still a long way off, with rising unemployment and a shortage of mortgage finance standing in the way, Hometrack said in its report.
Hometrack's monthly survey of estate agents' views of market conditions showed sellers were achieving an average of 91.5 per cent of their asking price, up from 91 per cent in June, and took an average of nine weeks to sell, down from 9.4 weeks.
'A lack of mortgage finance, low buyer confidence and growing fears of unemployment are currently being offset by increased demand, a pick-up in sales and a growing scarcity of housing for sale,' said Richard Donnell, Hometrack's director of research.
The lack of a change in average house prices at a national level masked sharp regional differences, with a scarcity of housing putting upward pressure on house prices in southern England, Hometrack said.
'When demand does start to feed back it will do so relatively slowly, starting in the equity-driven markets of London and the south, and only filtering down the rungs of the housing ladder as the economic recovery starts to gain momentum,' it said.
Surveys of house prices by mortgage lenders Halifax and Nationwide have shown sharper annual falls - down 12.5 per cent and 9.3 per cent respectively in June - than Hometrack's report, but also some sharp one-off monthly increases in house prices.
Mr Donnell said he did not think these marked the start of a durable recovery in house prices. 'The likelihood is that the tales of green shoots are proven to be little more than an unsustainable and short-term blip . . . fed by pent-up demand from opportunistic cash buyers and households looking for family homes in southern England where supply is most constrained.' - Reuters
Source: Business Times, 28 July 2009