House prices in UK unchanged in April

House prices remained unchanged during April as growing demand and rising sales helped to provide some support for the market, research has indicated.

House prices remained unchanged during April as growing demand and rising sales helped to provide some support for the market, research has indicated.

The stabilisation followed eight consecutive months of price falls, which have left the average home in England and Wales costing £153,100, according to property intelligence group Hometrack.

But the group warned that it expects prices to come under further pressure during the second half of the year as consumer confidence weakens.

The number of people looking to buy a home has increased by 22% during the first four months of the year, while agreed sales have soared by 46%.

However, Hometrack warned that the bounce-back in buyer interest was largely due to pent up demand feeding back into the market, following the weak second half of 2010, when many potential househunters sat on their hands.

It said this increase in demand was unlikely to be sustained over the rest of the year, as consumer confidence weakened, Government spending cuts kicked in and household incomes remained under pressure.

At the same time, new properties are continuing to come on to the market at a faster rate than potential buyers are registering with estate agents, creating a mismatch between supply and demand, which will put house prices under renewed downward pressure.

Richard Donnell, director of research at Hometrack, said: “The proportion of asking price achieved increased over February and March as levels of demand grew, but over April this measure has fallen back slightly to 92.6%, suggesting that while agents are still achieving sales, pricing levels are starting to come under pressure as would-be purchasers are presented with increased choice as supply grows.”

The group also pointed out that the market in London remained far stronger than across the rest of England and Wales, with property prices in the capital rising by 0.3% during April. But all other regions recorded price falls for the month, with the North East seeing the biggest slide at 0.4%, while prices dropped by 0.3% in Wales and the East Midlands.

Across England and Wales as a whole, prices increased in just 7.7% of postcodes, while they fell in 24% of areas and remained unchanged across the rest of the country.
Source: Press Association