2010 saw real estate prices fall in 71 percent of England and Wales according to Hometrack, with a continued decline predicted for 2011. As properties languish on the market, price support could come from exasperated sellers withdrawing homes from sale, thus reducing supply. See the following article from Property Wire for more on this.
Residential property prices in England and Wales fell for a sixth consecutive month in December to stand 1.6% lower than a year ago, according to the latest index published today (Monday December 27).
The figures from property data firm Hometrack, which asks estate agents to give achievable selling prices for different types of homes across the country, shows that prices fell 0.4% compared with November.Although the decline was half the drop seen in November, it nevertheless means that 71% of postcodes registered price declines over the course of 2010.
Hometrack said it expected further house price falls of 2% over 2011, similar to that predicted by the Royal Institution of Chartered Surveyors last week. Hometrack’s figures are not adjusted to take account of seasonal trends in the housing market but chime with other surveys in showing hefty public spending cuts and an uncertain economic recovery weighing on sentiment.
Britain’s government has embarked on the toughest spending squeeze in generations in an effort to reduce the budget deficit, and economists reckon almost half a million public sector workers could lose their jobs over the next four years.
‘Weak demand and falling supply will be the defining features of the market. Lack of mortgage finance and falling consumer sentiment are trends that will continue into 2011,’ the report from Hometrack pointed out.
The survey found that over the course of 2010 the supply of homes grew by 24% while demand fell by 7%. The average time taken to sell a property in December was 10 weeks, the longest since April 2009.
‘This decline is largely seasonal but the scale of the fall has been exacerbated by weaker consumer sentiment. All this at a time when expectations are that house prices are set to fall further,’ it added.
It also pointed out that a continued reduction in the supply of homes for sale seems inevitable in the coming months as vendors either reduce asking prices or withdraw property from the market. ‘We expect this to act as a support to pricing levels over the second part of 2011,’ it added.
The extent of house price falls stabilized over November with prices down across 54% of the country compared to 56% in October. But weakening market conditions have resulted in the average time on the market rising to 9.8 weeks, the highest level for 17 months since May 2009.The proportion of the asking price being achieved has dropped to 92.4% the lowest level since September 2009.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.