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.”