House prices fall by 0.2% despite rise in activity

Hometrack, the housing intelligence specialist, has reported that UK house prices fell for the sixth month in succession in March, by 0.2%. The decline brings the annual rate of growth to 0.4%.

Price falls were at their strongest in London and the South East, where values have been at their highest.

In terms of underlying market conditions the East Midlands, Wales, and the West Midlands appear particularly weak.

The average selling time in these regions is around 10 weeks and the proportion of the asking price being achieved is below average.

The survey does, however, reveal improvements in both the level of demand from potential purchasers, and the number of transactions.

March saw a 1.2% rise in new buyer registrations, following on from a slightly larger increase a month earlier.

Sales agreed rose 8% in March after a 20% increase during February. The average time taken to sell remained unchanged, at 8.5 weeks.

Richard Donnell, Hometrack’s director of research, comments: “Some bounce-back in market activity was inevitable after what has been a prolonged period of weak market activity. However the growth in demand over the last two months is only a third of the level seen in previous years, so the spring market is likely to be a non event this year.”

Mr Donnell expects pricing levels to remain under pressure in the coming months and is predicting a 17% drop in transaction volumes over 2008.

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