The Bank of England's efforts to cool the UK housing market have worked, according to a survey which claims the boom in house prices is over.
In a detailed study of eight key health indicators of the housing market over the last 12 months, Hometrack reveals that 2004 looks set to be the turning point in the housing market’s fortunes.
The statistics all say the same, according to Hometrack who pointy out a number of factors that indicate that the boom is over:
-
House prices fell last month for the first time since July 2003.
-
House price rises for the year to date amount to only 3.6%. The trend indicates further house price falls are likely.
-
New properties listed have been increasing in recent months, up 5% in July and up 3% in June. This increased supply is significantly up on 2003.
-
Against the increased supply has been a marked reduction in new buyers. New buyers fell by 4% in July, further reducing demand in the market.
-
Increases in sales agreed seen in the first half of this year have now gone into reverse.
-
Average sales price achieved as a percentage of asking price has been falling for the last 3 months (from 96.4% in March 2004 to 95.5% in July 2004.
-
Time taken to sell has increased from 4 weeks in May 2004 to 4.8 weeks in July. The number of viewings per sale has increased from 10.1 views in May 2004 to 10.4 views in July 2004.
-
The percentage of agreed prices downvalued by surveyors has risen from 1% to 2% over the last 4 months.
John Wriglesworth, Hometrack’s Housing Economist, comments: “Seldom in recent years have so many statistics, relating to the health of the housing market, all told the same story: the boom is over."
"The recent hike in interest rates, scaremongering speeches by the Bank of England Governor, as well as over-hyped newspaper articles have all combined to bring the housing market train to the buffers. Hometrack is forecasting 5% house price inflation for 2004, implying little or no further house price rises for the rest of the year."
"However, we see no prospect of a sharper crash in prices. Interest rates are still low by historic standards and there are no signs that households are finding it difficult to service their debt repayments. Employment and household income are also growing."
"The last housing market recession (post eighties boom) was caused by the sudden shock of mortgage rates rising from 7% to 13% in a matter of a few months, and this was in the context of 2 million unemployed. This is not going to happen this time round. With the steep climb over, the housing market has reached the plateau but is in no danger of tumbling into the abyss.”
Get
this news on your website !
Sponsored listings: