The latest Hometrack survey of the national housing market shows average house prices unchanged over the month.
This is the first time in 16 months that the survey of 7,500 agents across over 2,200 postcode districts has recorded anything other than a fall in average prices.
The recent price falls have been seen in ever decreasing parts of the market. The reality of the last six months has been that in the majority of areas house prices have been static.
Richard Donnell, director of research at Hometrack, says: “Over November average house prices remained unchanged in 84% of postcode districts covered by the survey while prices moved higher in just 4% of postcode districts.
“Most of the price rises were seen in the south of England, particularly in parts of inner London.”
On the back of renewed buyer interest and higher mortgage approvals over the summer, agents reported a 4% rise in the number of sales agreed over November.
This improvement in sales activity fits with a decline in both the number of viewings per sale and the proportion of sales falling through between an offer being accepted and exchange of contracts. Furthermore, the recent pick up in sales activity has resulted in the first decline in the numbers of properties available for sale for well over a year.
Donnell adds “The number of buyers registering with agents fell by 0.7% over November and is a trend set to continue as we move into December and in the run up to Christmas.”
While the second half of 2005 has seen something of an improvement in market sentiment, would-be buyers are still highly price and quality sensitive. The proportion of the asking price vendors are achieving has remained at around 93% for the last 12 months.
This proportion rose over October to 93.4% and has remained unchanged over November. Further evidence of price sensitive buyers is highlighted by the fact that the average time taken to sell a property remains historically high at eight weeks. Until there is clearer evidence of improving levels of demand then it is set to remain a buyers market.
Over November, average house prices fell in four out of the 10 regions. This is an improvement on October when house prices fell in eight out of 10 regions. Regions which have gone from negative growth to no growth over the last month are the South-West, Yorkshire and Humberside and Wales.
In London, agents reported average house prices rose by 0.1%. This is the first time the survey has reported a rise in the average regional house price since April 2005. Within London most of the growth was seen in the inner London boroughs around the key employment centres of Canary Wharf, the City and West-End.
Donnell says: “The housing market has been through a prolonged period of weakness in terms of both price growth and market activity over the last 18 months, primarily as a result of rising interest rates over late 2003 and 2004. Agents have reported a 2.5% fall in average values over the last 12 months while the average time taken to sell property has risen to a high of eight weeks.
“A move to more realistic pricing of property over the last year, combined with the cut in interest rates in August 2005 has resulted in some pent-up demand feeding back into the market over recent months. This has pushed up levels of sales activity but had limited impact on average prices, which are likely to remain unchanged over the next few months.”