Housing activity could drop to four-decade low - Mortgages - News - Moneyfacts

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Housing activity could drop to four-decade low

Housing activity could drop to four-decade low

Category: Mortgages

Updated: 28/11/2011
First Published: 28/11/2011

MONEYFACTS ARCHIVE
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The number of house sales in the England and Wales is set to fall to a near 40 year low with the slump likely to extend into 2012.

The housing market has struggled to build any meaningful momentum all year, and Hometrack says that it expects to see 840,000 property sales.

It would mean that the turnover of housing in England and Wales is at its lowest for 40 years and has fallen by almost 50% compared with just four years ago.

Figures show that house prices dropped by 0.2% in November, as was also the case in October.

Over the longer term, values have fallen by 2.3% over the last 12 months, with house prices down in each month since July last year.

Every region in England and Wales suffered falls in house prices with the exception of London where prices were unchanged for the second month in succession.

With the market suffering a drawn-out downturn, Hometrack said that only people's reluctance to put their homes on the market was keeping prices at their current level.

"2011 looks set to register the lowest level of housing turnover for 40 years – a trend that we expect to continue into 2012," said Richard Donnell, the director or research at Hometrack.

"An expected 840,000 sales in 2011 is almost 50% lower than in 2007 and equates to the average private sector home changing hands every 26 years.

"This is creating a scarcity if housing and is acting as a support to pricing levels."

The number of houses coming onto the market in England and Wales was further hit in November, as listings dropped by 0.8% as a result of problems in the eurozone and weak output in the UK economy.

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