According to Hometrack, the research group, house prices fell for the 15th month in a row in England and Wales in September 2005. The country’s average house price which peaked at £167,700 in June 2004 is now down at £160,900.
This goes on even as the buying activity in the home market increased by 5.5% in September as compared to 4.1% in August. The reduction of house prices has been computed at 3.7% in the last one year. In fact, the number of house buyers registered with realtors has increased by 20% in September as compared to the beginning of the year. Also seen side-by side is an oversupply of home property in the market. This suggests that prices would fall further in the coming months.
Hometrack has cited rising income levels, lower interest rates and an upbeat labour market as the reason for house-buying seeing an increase. However, according to Hometrack analyst John Wrigglesworth, "While another boom in house prices is not in prospect, a house price crash can clearly be ruled out."
Only four counties in the country saw an increase in price rise during September. In 21 counties prices remained static, while they actually fell in 32 counties.
The four counties which saw an increase were Central London, Gloucestershire, West London and West Yorkshire. On the other end of the spectrum were East Sussex where prices fell by 0.7%, Merseyside and Northamptonshire where they fell by 0.6%. North London also saw a price fall of 0.5%. Another indicator of falling prices has been the reduction of asking price of houses from 93.4% in August to 93.2% in September.
From the outside looking in it makes one wonder just how long Gordon Brown can keep up the illusion that all is well with the British economy and housing market. Job losses, no growth and vast personal debts for a large number of the population seem to point to a very dangerous position for Brown. It did seem that the Government were trying every trick in the book to prop up the housing market by releasing press and as of April changing pension rules to allow residential property investment in the form of SIPPs.
Perhaps some of these methods will do the trick but the latter will leave first time buyers out to dry, indeed this generation maybe the last that can actually afford to get on the so called 'property ladder'.
Perhaps consumer spending will suffer further as there is simply not the abundence of cash available via positive equity borrowing or the confidence to spend knowing that your pay packet will get a little bigger. The housing market, house prices and retailers look to be in for a rough winter. Brown could need an exit plan! could it be becoming PM and if so will any eceonomic crisis be forgotten by voters; more importantly, could any such situation be capitalised upon by opposition parties? Currently that too looks unlikely.
Posted
on : Mon, 03 Oct 2005 15:35 GMT | Mortgages News
By : Mark Richardson
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