Average house price drops below £200,000 - FT

Friday, 08, May 2009 10:22

The average price of a home has fallen below £200,000 according to the Financial Times House Price Index (FTHPI) released today.

The fourteenth consecutive monthly house price fall was recorded, as the average price of all property transactions completed was 1.1 per cent lower in April.

The annual average house price is now 14.2 per cent lower than a year ago, with the average price of a home in England and Wales down £33,830 since they peaked in February 2008, when the average home cost £231,822.

Dr Peter Williams, chairman of Acadametrics, who undertake the research, said house prices in "Wales are outperforming the English regions" on a monthly and annual basis. Of the five districts showing the smallest decline in prices, four were in Wales, with the FTHPI researchers suggesting Wales could be one of the first regions to "reach the bottom of the tough".

In the first quarter of 2009 the provisional number of sales transactions declined by 54 per cent, compared with quarter one of 2008. The decline in sales was most profound in Thurrock, 72 per cent, and Luton and Slough, both 67 per cent.

Dr Williams added: "The evidence from across the market remains mixed and there are few who are confidently predicting the bottom of the market. At present the lack of mortgage supply is casting a shadow over the prospects for recovery.

"The chancellor announced a new asset backed guarantee scheme in the recent Budget which it is hoped will help restart the securitisation market, and this may assist although it is unlikely to impact in 2009. Consumer confidence has recovered slightly and HM Revenue & Customs has reported an increase of 40 per cent in home sales in March, albeit from a very low base in February.

"These positive aspects have led some to suggest we are now close to bumping along the bottom of the house price trough. Frankly no one knows, and only time will tell."