FT: House prices down 0.2 per cent in April

Friday, 09, May 2008 10:41

Average house prices in England and Wales fell by 0.2 per cent in April, according to the latest research from the Financial Times (FT).

This is the second consecutive monthly fall, the first time this has occurred since April 1995.

As a result, average annual price growth in the market fell to 4.1 per cent.

This is down from the 5.2 per cent recorded in March, and is the eighth successive month in which the annual growth rate has fallen.

Annual growth is now at the lowest level since February 2006, but remains positive.

Halifax recorded a 0.9 year-on-year drop in average prices in April for the whole UK property market - the first time prices have dropped over a year in more than a decade.

Nationwide, RightMove and Hometrack have also all reported transaction and asking prices have slowed during April.

"The FT index reports on final transaction prices, as distinct from the asking and mortgage offer prices reported in all but one of other series," said Dr Peter Williams, chairman of Acadametrics, which carried out the research for the FT.

"Regardless of stage in the transaction process, all five of the indices that have reported on April to date record negative prices. This suggests we will continue to see a downward trend in the short term at the very least."

However, while London prices continue on their downward trend, the city still has an annual growth rate of 10.7 per cent, when averaged over the last three months - some four per cent higher than the next highest region.

Outside of the capital, the south east - at 6.4 per cent - has recorded the largest annual increase.

Eight of the ten regions in England and Wales now have an annual growth rate below four per cent, whereas a year ago none were in this position. Four regions - the north west, east Midlands, west Midlands and Wales - have an annual rate below two per cent.

"Despite the Bank of England's intervention in the wider financial market, through its special liquidity scheme, interest rate cuts and ongoing dialogue between mortgage lending firms and government, the current housing market correction is being amplified by a contracting mortgage market," explained Mr Williams.

Just 64,000 loans for house purchase were approved in March 2008 - compared with 115,000 a year previous.

Chris O'Toole