Housing market 'losing momentum' as election nears

Published 27th Apr 2010

The housing market continued to lose momentum during April as potential buyers remained cautious in the face of the general election, according to research by Hometrack, the property intelligence company.

The report indicates that house prices in England and Wales edged ahead by just 0.2 per cent during the month, following increases of 0.3 per cent during February and March.

However, Hometrack warned the headline figure for house price rises during the month was being skewed by the London market, where the average cost of a home rose by 0.6 per cent.

In Yorkshire and Humberside prices fell by 0.1 per cent, while in Wales they remained unchanged. Overall, house prices increased in just 19.4 per cent of postcodes during the four weeks.

The report also suggests that the rate at which properties came on to the market outstripped demand from new buyers for the third consecutive month, further reducing upward pressure on prices.

Hometrack said that estate agents appeared to be finding it increasingly difficult to maintain price rises. Richard Donnell, the company's director of research, said: “The supply of homes for sale continues to outstrip demand.

“This is a trend that has been evident for the last quarter, but lies in stark contrast to the final months of 2009, when buyers far outnumbered the supply of properties for sale.

“As the supply of homes for sale continues to outpace demand, so the impetus for price rises is set to wane.”

Hometrack said that estate agents were reporting that buyers were taking longer to commit to properties, with the number of viewings needed per sale increasing for the third consecutive month.

At the same time, the percentage of their asking price that sellers were achieving remained unchanged at 94 per cent, ending a 13-month run of consecutive increases, while the average time it takes a home to sell remained 8.3 weeks.

The company said the number of potential buyers registering with estate agents had risen by just 1 per cent during the month, while the supply of homes being put up for sale had increased by 3.7 per cent.

It added that the election was being cited as a factor behind buyer uncertainty, and had contributed to a sharp slowdown in the rate at which agreed sales were increasing, with this dropping from 13 per cent to 6.9 per cent during the month.

Mr Donnell said: “There has been evidence for some months that the supply and demand balance has been changing steadily, but the buyer slowdown has been exacerbated by the announcement of a May election.”

Source: ' Times '

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