House price rise masks sharp fall in transactions
Friday, 11 November 2011 9:09 AM
Property transactions fell by six per cent in the year to October as housing market activity seized up, according to the latest LSL Property Services/Acadametrics house price index.
The fall followed a sharp rise in transactions in September as buyers moved to take advantage of low mortgage rates. Analysts say lenders reined themselves in during October as fears grew about the Eurozone crisis.
The 56,000 transactions in October was only 60 per cent of the long-term average in a month that would usually see a seasonal increase.
However, demand from buyers with cash for large deposits was enough to sustain a 0.2 per cent rise in prices in October. That reduced the annual change from -1.9 per cent to -1.3 per cent.
As with other indices, the LSL/Acadametrics study shows a two-tier market developing with prices outside London falling 2.7 per cent in the last 12 months and the capital being the only region to see a rise (+2.5 per cent).
David Newnes, director of LSL Property Services, said: "It is testament to the resilience of the national market that the ongoing economic problems the nation faces have not caused property prices to fall further in the last 12 months."
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