Housing slump could have bottomed out

Author: By David Prosser

Hometrack?s monthly survey has reported 0 per cent changes to house prices in
May, June and July, but the analyst said it had seen some positive signs of
an uptick over the past four weeks.

The number of new buyers registering with estate agents rose by 2.8 per cent
last month, Hometrack said, while the average time on the market for a
property before selling fell to nine weeks, from 9.4 weeks in June. Just 3
per cent of postcodes nationwide saw a decline in average prices, it added,
while the typical buyer is now achieving a sale price of 91.5 per cent of
their asking price.

Nevertheless, Hometrack warned that the UK housing market remained fragmented,
with a north/south divide in optimism. It also believes a strong recovery
for house prices may still be some years off.

In the North, estate agents continue to report a difficult market, with weak
demand for property. By contrast, almost all of the postcodes registering a
house price increase during July ? around 10 per cent of the UK ? were in
the South of the country, where demand has increased but supply is
relatively limited.

Richard Donnell, director of research at Hometrack, warned that in the absence
of a sizeable increase in mortgage lending and in the face of rising
unemployment, the prospects for the housing market were poor.

?A sustainable and broad based recovery needs to be founded on both an
improving economic outlook and availability of mortgage finance – employment
is key to buyer confidence and with talk of unemployment figures set to rise
to 3 million next year, the short term outlook for would-be buyers remains
uncertain,? he said.

?In the last recession it took five years from the peak of the market to the
beginning of a sustainable pick up in transactions and house prices.
Approaching two years into the start of the current downturn, history
suggests the market has some way to go before the real green shoots of
recovery begin to emerge.?

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