View more on these topics

House prices rise just 0.1% in January

The housing market slowdown is continuing with no evidence of a new year revival, the latest hometrack survey reveals.

House prices rose only 0.1% in January, the same as the previous month. This follows an eight-month steady decline in house price inflation since May&#39s peak of 2%.

The slowdown has been mostly due to prices of higher value homes falling in London and the south-eastern counties.

Areas with the highest price falls are central London and the City, where prices fell 0.4%. Prices in Berkshire, south-east London and west London all fell 0.1%.

Elsewhere in the country, prices mostly continue to rise. The highest price rises occurred in Derbyshire (0.5%), Cornwall (0.4%) and Leicestershire (0.4%).

The average price of the 20 counties with the highest price rises is £119,531, whereas the average price of the 20 lowest performing counties is £180,361. Hometrack says that the continuing house price slowdown is stemming from the high value top-end of the housing market while the more affordable homes, mostly in the outer counties, are still showing fairly healthy price rises.

Prices achieved as a percentage of asking price fell again for the seventh month in succession to 95.8%, the lowest since February 2001. The recent peak was 97.7% back in June last year. It is presently taking 4.8 weeks to sell a home, and on average there are 9.9 viewings per property sold.

John Wriglesworth, hometrack&#39s housing economist, says: “The housing market is stagnating and as yet there is no evidence of any green shoots that would indicate a spring recovery. London prices continue to fall, especially at the top end of the market.

“Meanwhile, all other regions are still rising, albeit at a slower rate than six months ago. We continue to forecast 4% price rise for this year as a whole. Outside the expensive areas of London and the South-East there is plenty of property at affordable prices.

“With interest rates set to remain low and general employment levels remaining high, there is little likelihood of a housing market crash in the foreseeable future – this despite fears of an impending war with Iraq.”

Recommended

Consumer Panel calls for review of law on financial advertising

The Financial Services Consumer Panel has highlighted legal restrictions on the FSA which the panel says are harming more consumers than they help. Colin Brown, chairman of the panel, has written to FSA chairman Howard Davies, setting out the Panel&#39s concerns. As the law stands, once the FSA has received a complaint about an advertisement […]

Record lending for KMC in second half of 2002

Kensington Mortgage Company lent a record £603m in the six months ending November 2002, taking new business origination to £1.02bn for the year – 48% more than 2001, writes Harriet Williams. Pre-tax profits rose by 21% to £30.2m, while earnings per share increased 31% to 40p. Investment in sales force and distribution paid off with […]

Halifax drops cost of fixed rates

Halifax is cutting the price of fixed rate mortgages. A two-year fixed rate for homebuyers is falling from 4.4% to 4.3%, while a three-year fix drops from 5.15% to 4.99%. A five-year fix falls from 5.4% to 5.2%. For remortgages, Halifax is dropping the two-year rate to 4.59%, while a five-year fixed rate is available […]

Record year for Universal

Universal Building Society increased its assets by 8% to £467m in 2002, reflecting a year of record levels of new business both in terms of mortgages and investments. Net profits increased 35% and mortgage arrears levels declined by 53%. Universal Direct – the telephone and postal arm of Universal – performed particularly well thanks to […]

Newsletter

News and expert analysis straight to your inbox

Sign up