House price decline slowest since July

Monday, 9 February 2009 11:02 AM

The decline in average house prices slowed in January, according to the Chesterton Humberts' CEBR House Price Poll of Polls for the month.

The poll found that January witnessed the smallest nominal decline in house prices since July 2008, at just £2,818.

The average price of a residential property in England and Wales is now £167,751, a 1.7 per cent drop from December, falling to their lowest level since September 2005.

Annual house prices declined for the seventeenth successive month, falling by 15.3 per cent over the year to January 2009. House prices fell in all UK regions and countries in January, with the exception of Scotland - where prices were flat.

In London, house prices fell by 1.5 per cent in January, up from an average of two per cent over the last six months.

Douglas McWilliams, chief executive of CEBR, said: "House price declines continued in January, although the pace of falls has showed signs of easing of late as affordability improves and various key players reported that interest had picked up.

"However, the ongoing lack of finance is the fundamental issue causing another 1.7 per cent drop in the average house price in England and Wales on the Poll of Polls, taking the annual decline to another record low at 15.3 per cent. London has caught up with the rest of the UK housing market, with prices having fallen by 11.2 per cent in the second half of 2008 and now 14.9 per cent down on the year to January 2009."

The poll showed access to finance continues to hinder all levels of the market, with both the top and bottom 20 per cent of properties experiencing a 1.7 per cent fall in prices.

Robert Bartlett, chief of Chesterton Humberts, said: "As the New Year takes shape, we are seeing the first glimmer of house price positivity. As the rate of decline slows, confidence is beginning to return to the market.

"Throughout January we have seen a marked increase in the numbers of viewings and offers being made. As soon as funding becomes more readily available we will see this translate into sales being agreed for qualified buyers and with more traditional loan to value ratios - a must for longer term stability.

"Vendors have finally become much more realistic in their expectations and most will still realise substantial gains in their asset value. It is clear that the property market has already taken a substantially harder hit than any index has yet shown and many buyers now perceive better value. Faced with an alternative of, in essence, negative savings returns (after tax and inflation) elsewhere, property is now beginning to look like a much more interesting longer term investment again. Particularly so, as the demand in rental market remains buoyant."

Tags:
• uk property news