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 19 July 2008 15:44 BST

Teetering house prices 'stagnated in March'

Monday, 21 Apr 2008 00:01
House prices drifted downwards in March, Rightmove says

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Average asking prices for residential property in England and Wales fell by 0.1 per cent in March, according to property website Rightmove.

This represents a sharp reversal of the 0.8 per cent growth in asking prices recorded in February.

As a result of the fall, annual growth has slumped to 1.3 per cent, the lowest figure since July 2005, and down from the five per cent growth recorded in February this year.

The average asking price for a property in England and Wales is now £239,521 – just £134 lower than last month's figure of £239,655.

"Buyers who have saved through the winter and are now emerging to enter the spring market will find there are deals to be had," said Miles Shipside, commercial director of RightMove.

"It's a buyers' market, but only if that buyer is buying for cash or can put down a good deposit."

Across the country East Anglia saw surprising growth, with prices up 5.5 per cent, followed by growth of 2.9 and 2.3 per cent in the West Midlands and south-west respectively.

However in London asking prices were down by 0.9 per cent, while the north-west (1.4 per cent) and south-east (0.1 per cent) also saw drops.

Estate agents now have an average of 70 properties on offer, up from 67 in February.

Following the research RightMove continues to predict falls will remain modest.

With fundamentals, including high employment and low inflation, remaining strong, stagnation in the market is the likely result, with depressed sales volumes as opposed to substantial price falls.

However, an ongoing lack of mortgage funds could trigger a price crash if an increasing number of sellers are forced to seek rarer mortgage-free cash buyers or those with large deposits, warns RightMove.

"Neither a crash nor the current stagnation is a palatable or politically acceptable outcome," said Mr Shipside.

"Unless the anticipated steps to be taken by the Bank of England are effective, potential buyers will be impotent to the seduction of lower asking prices, unless they are cash-rich."

Speculation has been gathering pace this week that the Bank of England will offer lenders an opportunity to swap mortgage collateral for government bonds during the next few days.End of story


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