UK house prices fall for fourth month running in Oct - Hometrack
Monday, October 25, 2004 9:27:03 AM
afxpress.com
LONDON (AFX) - House prices in the UK fell for the fourth successive month in October as higher borrowing costs continue to take their toll, according to Hometrack, the property website
Hometrack found that house prices fell by an average of 0.6 pct during the month largely as a result of an excess supply of properties in the market and falling numbers of registered buyers
As a result, Hometrack is now predicting no change in prices in 2005, though there are likely to be further house price falls in the coming months
"While rising interest rates have influenced the recent run of house price falls, the key reason for the stagnating house price environment is that house prices have finally reached their peak in the current cycle," said John Wriglesworth, Hometrack's housing economist
Nevertheless, Wriglesworth stressed that the present high levels of house prices can be maintained, given historically low interest rates, low unemployment and rising household incomes
"We see no sudden or significant prospective downturn," he added. "Stagnation, not deflation, is the most likely future course of house prices over the next 18 months." Today's survey is likely to cement expectations that the Bank of England will not raise interest rates again this year
A raft of weak economic data in recent weeks has convinced most Bank watchers that the rate-setting Monetary Policy Committee will keep its key repo rate unchanged at 4.75 pct at November's rate-setting meeting
The MPC has raised the cost of borrowing a quarter point on five occasions since last November in an attempt to curb inflationary pressures stemming from rampant consumer demand, particularly in the housing market, and above-trend economic growth |
