House Prices Continue to Level Out, Shows Chesterton Humberts Poll of Polls

08 June 2009

Only £1,503 was wiped off the price of an average house in England and Wales in May, compared to the previous six month average of a £2,149 monthly decline.

Over the year to May 2009, house prices in England and Wales fell by 16.3% to reach their lowest level since July 2004.

The low volume of house sales, the lack of housing stock on the market and the slowing price of house price falls has caused monthly house price changes to become increasingly volatile, sometimes producing conflicting reports of house price moves across different indices.

The price of an average house in London now stands at £293,860, 17.0% below its February 2008 peak and 16.1% lower than in May 2008.

Across all local authorities in England and Wales, 85% have seen house prices decline by at least 10% over the year to May.

Robert Bartlett, Chesterton Humberts CEO, comments:

“We are experiencing a significant upturn in business with much more activity in the market.  While prices are not yet increasing I believe that we will start to see an increase in values by mid summer as a combination of the shortage in available properties, increased buyer demand and historic low mortgage rates start to create a positive environment for an upturn in the market place.

“Confidence in the UK housing market seems to be returning, and for many people an investment in bricks and mortar is seen as offering a better return and a safer environment than the banks or stock market.
 
“However, buyers and sellers alike are becoming frequently more frustrated by the time it takes for transactions to progress. The average time it takes for properties to proceed from being under offer to exchange is now in excess of 68 days, significantly up from the average of 27 days around 18 months ago.   Delays in receiving mortgage offers from lenders and legal processing have more than doubled the sales period. 

“HIPS are done nothing to speed up this process as was promised by Government and indeed in many circumstances have caused considerable delay and further costs to each party. Many lawyers are unwilling to rely on the information within a HIP and are therefore repeating the process which means both buyers and sellers are now paying for the same work to be done twice. 

“These delays in sale processing have unfortunately also contributed to a resurgence of gazumping as buyers start to chase the shortage of stock.”

Douglas McWilliams, Chief Executive of CEBR, comments:

“Whilst the pace of monthly house price falls continues to decline, activity in the mortgage market continues to increase.

“The number of approved loans for house purchases rose to 43,000 in April after a similar sized rise in March. Mortgage approvals have now risen for three consecutive months to reach the highest level since April 2008, still 60% lower than the level in April 2007.

“Despite what several house price indices appear to be saying, we have not yet seen the bottom of the market for property prices at the point of sale, although we are almost certainly close.

“Several indices that track house prices early in the transaction process have been showing monthly house price rises over recent months. In line with this, and taking into account the timeliness, lag and accuracy of these indices, we could see average house prices in England and Wales rise in June.”