Hometrack: House prices down 0.6% in April

Monday, 28 April 2008 12:15 AM

House prices in England and Wales fell by 0.6 per cent during April, according to the latest national housing market survey from Hometrack.

This is the seventh consecutive monthly fall, and sees the annual rate of growth has slip to -0.9 per cent - the lowest level since January 2006

Over the month some 51.4 per cent of postcode districts saw prices fall, compared to 28.8 per cent in March and 33.2 in February.

At present 93 per cent of properties achieve their asking price, a figure lower than those recorded in both March and February.

Homes now spend an average of 9.1 weeks on the market before completing a sale.

"While the availability of finance is impacting on demand in certain segments, the reality is that weak confidence is effectively resulting in a 'buyers strike' with households sitting on the sidelines and waiting to see how events unfold," commented Richard Donnell, Hometrack's director of research, on the figures.

"As we predicted last year, transaction volumes will be the big casualty and there now seems the prospect of a record low in residential sales volumes in 2008."

The Hometrack research finds there was a 3.6 per cent increase in the number of properties listed for sale during April, illustrating a slowdown from the 4.6 and 8.2 per cent recorded in March and February respectively.

"The factors impacting on the market today are very different from the 1990s when households were effectively forced to withdraw from the market for economic and financial reasons," explained Mr Donnell.

"The current weakness in demand today is largely confidence driven - the fact that the majority of house moves are 'aspirational' rather than 'need' based is only exacerbating the problem."

On a regional basis prices were down over the month in all regions with the falls ranging between 0.5 per cent in both the north and north-west and 0.8 per cent in East Anglia and the West Midlands.

The slightly lower falls in the northern regions are down to the fact these markets have been going through a re-pricing process since 2005, finds Hometrack.

London has seen prices fall 2.2 per cent in the last six months, but this must be considered against large annual gains in previous years.

"The current downward pressure on prices will only start to be reversed once there is a turnaround in buyer confidence, the timing of which, is almost impossible to predict but will revolve around greater stability in the financial markets and an improved economic outlook," said Mr Donnell.

The figures paint a gloomy picture for the UK housing market. As Howard Archer, of analysts Global Insight, points out: "Hometrack's April survey makes pretty depressing reading all round, indicating that the housing market is continuing to sink as it is holed by the damaging combination of stretched buyer affordability and very tight lending conditions."

Chris O'Toole

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