UK housing price recovery stalls

UK housing price recovery stalls
Dec 15, 2009 - PropertyGuru.com.sg

The recovery of the housing market in the UK will peter out next year, as supply of homes surge due to forced sales, said Rightmove plc.

The average asking price will idle in 2010 after a 2 percent increase this year, said the biggest property website in the UK. Prices dropped 2.2 percent this month to £221,463 (S$501,207), and this may fall again next month, it said.

Banks may also show “less forbearance” to consumers who defer their mortgage payments after the general election in 2010. The shortage of available properties helped stir up prices this year and erased several losses in values caused by the economic slump.

“2009 turned out to be a good time to trade up,” said Rightmove commercial director, Miles Shipside. “We forecast the positive mood will continue into 2010 until the post-election hangover kicks in.”

Asking price in the North of England fell 5.8 percent from November, making it the worst-performing of 10 regions tracked by Rightmove. East Anglia was the only region to have a monthly increase, with price rose to 0.5 percent in November.

In London, prices fell 1.2 percent while in Hounslow, prices dropped by 6.2 percent. The second biggest drop was in Kensington and Chelsea, the capital's most expensive district, where prices dropped 5 percent or nearly £100,000 in one month.

The average number of properties available for property agents fell to 67 from last month’s 69, making it the lowest since February 2008.

The Council of Mortgage Lenders deterred its UK mortgage repossessions this year after low interest rates helped households paid their debts. The CML last month accounted 48,000 repossessions, down from 75,000 from earlier predictions.

Mortgage repossessions may increase in the second half of next year, as banks become less patient to homeowners who have their payments delayed, said Rightmove.