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Last Updated: Jul 31st, 2011 - 17:29:39 |
LONDON (Reuters) - House prices in England and Wales were unchanged in May, the first time in 20 months that there has been no month-on-month decline, property data company Hometrack said on Monday.
House prices are still down 9.6 percent on a year ago, but the end of the run of monthly house price falls chimes with more bullish news from mortgage lender Nationwide, which reported house price rises for two of the past three months.
Hometrack said that a rise in sales and a shortage of supply was behind May's steady house prices, but warned that prospects for a sustained recovery in house prices were still poor.
"Quite simply it is too early to rule out future price falls and the sensible money would be on further falls in the next 12 months," said Richard Donnell, Hometrack's director of research.
"Given the weak outlook for the economy, house prices are expected to remain under downward pressure for the foreseeable future," he added.
Even though home sellers were now pricing more realistically, volumes of home sales remained well below normal as buyers found it hard to get finance, Donnell said.
Unemployment is forecast to rise steadily into next year, and banks are reluctant to lend unless buyers have much higher deposits than during the boom which caused house prices to triple between 2000 and late 2008. Prices are now about a fifth below their peak.
Hometrack's survey is based on responses from 1,776 estate agents and surveyors, who are asked to estimate achievable selling prices for various categories of property. The survey is not seasonally adjusted to reflect the greater activity in the housing market in spring and early summer.
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