The latest LSL HPI released last week shows:
– Average house prices recorded a marginal fall of 0.2% in December
– Over the 12 months January to December 2010, house price growth stood at 2.9%, compared to 5.3% in 2009.
– Regional disparities are widening
– The number of transactions continues to decline, falling in December 2010 by 5%, and are down 33% compared to December 2009
LSL say that they estimate that the number of transactions in December will be around 53,000, 5% down on November levels and a staggering 33% below the number of transactions in December 2009; however this latter figure was enhanced somewhat by buyers seeking to purchase a property prior to the end of the stamp duty holiday on 31st December 2009. The long term trend over the last 15 years has been around 93,000 properties sold in the month of December so the current level of 53,000 is 43% below average levels for the last 15 years.
David Newnes, estate agency managing director of LSL Property Services, owners of Your Move and Reeds Rains comments:
"While average house prices are falling, the steady rate of the decline indicates a degree of resilience in the market. While it is true that there is a shortage of buyers seeking new properties, this is largely driven by the continuing drought in mortgage finance. Although the average LTV for first time buyers rose to 80%, the total number of house purchase loans is down 4% – indicating that mortgage refusals have become more frequent. However, if prices begin to tumble more quickly, the spectre of negative equity could have a significant impact on buyer and lender confidence. Nevertheless, there are currently plenty of would-be buyers available to take on mortgage products where they are offered and for those with a large amount of spare cash, the current market still represents a good opportunity to invest in affordable property.
“The disparity between the regions is widening. In traditionally high-value areas such as London and the South East price growth has been significantly stronger than the national average and this is likely to continue through 2011. Public sector cuts will have a particularly heavy impact on prices in northern England and Wales and this means the value-gap could become a chasm as the year goes on.”
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