–Hometrack: UK Nov House Asking Prices -0.8% m/m; -1.1% y/y

LONDON (MNI) – House price deflation intensified in November, with
prices dropping 1.1% on a year-on-year basis after having turned
negative in October, according to Hometrack’s Monthly National Housing

House prices also fell for the fifth consecutive month in November,
but at a less steep rate than in October, Hometrack said.

House asking prices fell 0.8% on the month in November, having
dropped 0.9% on the month in October and by 0.4% on the month in

The number of new buyers registering with estate agents fell at a
sharper rate in November, dropping 4.3% on the month versus a 2.0% drop
in October – the data add to the evidence of weakening demand in the
housing market.

Another survey based on house asking prices, from Rightmove,
reported a 3.2% monthly dip in prices in November. Rightmove attributed
that fall to both buyers and sellers waiting to see how the market

Property turnover in the housing market remains sluggish, with
Hometrack saying the average time a property is on the market is now
9.8 weeks, the longest average time since May 2009.

Richard Donnell, research director at Hometrack, said he expected
house prices to drop by 2% in 2011.

“Looking ahead the real impetus to reduced supply is set to come
from agents. Over the coming months estate agents will be turning their
attention to the supply of homes on their books anxious to adjust stock
levels to realistic prices more closely aligned to demand. The reality
is that in the months ahead vendors will either need to reduce prices or
withdraw property from the market,” he said.

“This is a process that will run over the next 3-6 months and will
result in a gradual tightening of supply, a trend that will act as
something of a support to prices over the course of 2011. In the near
term we expect demand to remain weak and this will continue to put
downward pressure on prices in the coming months. Over the course of
2011 we expect average house prices to decline by -2%,” he added.

What is looking like a long-term stagnation of the UK house market
will add to the policy pressures facing the Bank of England’s Monetary
Policy Committee.

–London Bureau; Tel: +442078627491; email: wwilkes@marketnews.com