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FT: House prices hit 12 year low
According to new figures, the UK housing market is still on a downward spiral...
Research conducted by the Financial Times shows that the price of the average home fell by 0.6 per cent during the month of May - the largest monthly decline for 12 years during May, and – according to the FT – the most marked monthly decline since February 1995. The fall is the third consecutive monthly drop and brought the rate of annual house price inflation down to 2.7 per cent, compared with a figure of 3.9 per cent in April.
Dr Peter Williams, chairman of Acadametrics - the company that conducted the research for the FT - said: "The continued contraction and re-pricing in the mortgage market are adding to the downward pressure on prices and there is little sign yet that liquidity is recovering. But decline in the mortgage market should not be exaggerated."
The FT Index, which is adjusted to take account of the actual property mix in England and Wales instead of simply the mix of properties sold, includes home purchases and sales that did not require a mortgage. Restrictions on credit availability have weighed heavily on home prices but have not been a concern for, say, older sellers who are downsizing and moving to a smaller property.
Regional variations
Mr Williams further explained: “The FT Index includes final sale prices as distinct from asking or mortgage offer prices. There is a great deal of haggling over prices with sellers accepting prices lower than that originally asked, albeit rather slowly”.
Within regions, the rate of house price inflation has slowed markedly in Greater London, falling to an annualised rate of 8.5 per cent in the three months to May from 18.7 per cent last August. Measured on a similar basis, house prices have slowed almost to a complete halt in the North West and Wales and have fallen 0.3 per cent on an annualised basis over the past three months in the East Midlands.
There were also wide variations in performance among counties. House prices in Buckinghamshire rose at an annualised rate of 12.3 per cent over the past three months while those in Blackpool fell by 4.8 per cent as measured on a similar basis.
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