Biggest drop in 3 years in British house prices
(LONDON) UK house prices fell the most in more than three years in April as a dearth of credit and concern that the property slump is deepening deterred prospective homebuyers, Hometrack Ltd said in a statement yesterday.
The average cost of a home in England and Wales dropped 0.6 per cent - the most since December 2004 - to £173,100 (S$468,300), the London- based research company said in a statement. Prices declined 0.9 per cent from a year earlier.
A surge in borrowing costs has prompted banks to withdraw their best mortgage offers, worsening the housing decline. Falling home prices are sapping consumer confidence and held economic growth to the slowest pace since 2005 in the first quarter.
'Weak confidence is effectively resulting in a 'buyers strike',' Richard Donnell, director of research at Hometrack, said. 'The current downward pressure on prices will only start to be reversed once there is a turnaround in buyer confidence' that will 'revolve around greater stability in the financial markets and an improved economic outlook'.
The report is based on a survey of 3,500 real estate agents and surveyors, calculating average values using judgments of achievable prices rather than sale prices alone. Prices fell in all 10 of the regions Hometrack follows. East Anglia and the West Midlands led declines, with a 0.8 per cent drop. Prices in London, home to 1-in-8 of the UK population, fell 0.7 per cent.
The findings add to evidence that the housing slump is deepening. House prices declined 2.5 per cent last month, the most since 1992, according to HBOS Plc, the largest UK mortgage lender. The Royal Institution of Chartered Surveyors' measure of sentiment in the UK housing market fell to the lowest since records began in 1978.
Mortgages approved by banks fell 46 per cent in March from a year earlier to the lowest level since 1997, the London-based British Bankers' Association said last Wednesday. The Bank of England is due to publish estimates of mortgage advances by all lenders today at 9:30am in London.
Falling property prices make Britons feel less wealthy and reduce the amount of equity owners can tap for spending. A threefold increase in home values over the past decade has helped the UK economy expand for 63 quarters.
The slump has put the economy on course for its worst performance in 16 years, with the International Monetary Fund predicting growth of 1.6 per cent this year. Growth was 0.4 per cent in the first three months of the year, the Office for National Statistics said last Friday.
The Bank of England, backed by the Treasury, last Monday offered to swap around £50 billion in government bonds for mortgage-backed securities in an effort to kick-start lending.
Higher money-market funding costs are making lenders reluctant to pass on three Bank of England interest rate cuts since last December to homeowners. Royal Bank of Scotland Group Plc and HSBC Holdings Plc have led writedowns among UK banks on securities tied to US sub-prime mortgages. Losses worldwide total almost US$309 billion. -- Bloomberg
Sign of the times: House prices in London, home to 1-in-8 of the British population, fell 0.7% in April
EastLiving.com.sg
Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
No comments:
Post a Comment