A turnaround is in sight for the housing market, says a new report. Wales is on the high road and London is holding steady, although the south is seeing further falls.

The hometrack national July survey of the housing market reports flat (0.0% change) house prices for the second month in a row, after two months of small falls earlier in the year (-0.1% in both April and May). This has prompted John Wriglesworth, hometrack’s housing economist, to revise their forecast for 2003 down to 3%.

There is continuing evidence that the housing market is stabilising, with price changes across the country being negligible in all areas. Overall, Wales leads the country’s price rises (overall +0.2%), whereas London and the majority of the country have seen little or no house price rises.

Southern counties’ house prices, which have been seeing quite significant falls over the past year, seem to be moderating, with the largest fall being only –0.2%. The cumulative overall change for the country since December is 0.0%.

Across the country

Overall, 24 counties reported no change in prices. There were 16 counties which saw price rises, the highest changes occurring in Mid Wales, North Wales (both +0.3%), South Lincolnshire, South Wales and South Yorkshire (all +0.2%).

Meanwhile, 17 counties reported small price falls. The largest falls occurred in West Sussex, Surrey, East Sussex, Bedfordshire and Avon (all –0.2%).

The average house price of the ten counties with the highest price rises is £91,530 whereas the average house price of the ten counties with the highest price falls is £178,030. The average house price for the country as a whole is unchanged at £135,200.

Persistent falls only in the South East

Price falls in the south have lessened to the extent that the only region where house price falls have persisted is the South East. Stable or modest rises in all other areas of the country are now the norm and price rises in the North have reduced.

While the number of new properties listed grew again by 2.8%, the number of new buyers rose by less than 1%. As a result, hometrack’s unique ‘national demand index’ now shows that supply and demand have moved into broad balance after a long period of excess demand.

On average, it is currently taking just over 5 weeks to sell a home with an average of more than 11 viewings per sale.

Whilst these figures point to a lengthy sales process compared with height of the boom in May last year, other factors point to an improvement in the housing market. Prices achieved as a percentage of asking price have risen for the first time in thirteen months to 94.5% (last month 94.3%), and there has been a further 4% uplift in sales agreed, building on last month’s 5% rise. Both these figures suggest the market is on a firmer footing after recent uncertainty.

John Wriglesworth, hometrack’s housing economist, comments:

“In terms of price changes, there has been nothing happening since December and the housing market remains as dull as ditchwater.”

“Activity levels are, however, picking up slowly and better sales prices are being achieved. Demand growth is still not matching supply, but the market is certainly looking more positive.”

“In light of the ongoing stagnation in house price movements, we have reviewed our forecast for 2003 down from 4% to 3%. Compared with the large rises of 2002, prices changes this year are becoming more even across the country, with recent southern price falls reducing and northern price rises falling. We expect this to continue over the coming months.”