Monday 29 June 2009

DATA SNAP: UK House Prices Steady In June; Outlook Uncertain

Sun, Jun 28 2009, 23:01 GMT

DATA SNAP: UK House Prices Steady In June; Outlook Uncertain

By Ilona Billington

LONDON (Dow Jones)--U.K. house prices were unchanged for the second straight month in June as demand for properties is rising more quickly than the number of available properties for sale, a survey by Hometrack showed Monday.

The company, which specializes in providing research and data on the residential property market, said house prices were flat on the month in June and fell just 8.7% on the year.

That compares with a flat monthly reading in May and a 9.6% decline in annual terms, Hometrack said.

"A lack of supply and rising demand have combined to prop up house prices in the last 2 months," said Richard Donnell, director of research at Hometrack.

Hometrack said since the beginning of the year the volume of buyers has risen 36%, while the number of properties for sale has risen just 6.4%. However, with the economy remaining in recession and unemployment set to rise in the coming months, a full recovery of the housing market isn't a certainty.

"The jury is still out as to whether the momentum gained over the spring and early summer can be maintained for the rest of the year," Donnell said.

Hometrack data show that sales are up 80% since the beginning of the year, with sales volumes rising 4.6% in June alone.

And, the average time it takes to sell a property has fallen yet again to 9.4 weeks in June, down from 9.9 weeks in May and 10.4 in April.

The percentage of the asking price being achieved by sellers also continued to improve in June, rising to 91% from 90.3% in May and 89.6 in April.

However, while these numbers are in line with other house price surveys reporting rising mortgage approvals and some monthly increases in average prices, the economic outlook and still tight credit conditions mean that any recovery in the U.K. housing market will be a long and slow process.

"The two key risks for the market are either a renewed weakening in demand or a surge in the volume of housing for sale," Donnell said. "Given the uncertain outlook for the economy it is the demand side where the greatest risk lies as many would-be buyers continue to remain cautious or are unable to obtain sufficient equity or finance to access the market," he said.

By region Hometrack reported that prices were flat in nine of the 10 regions covered in the survey. Price rose 0.1% on the month in June in Greater London.

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-By Ilona Billington, Dow Jones Newswires; +44 7 842 9452;

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(END) Dow Jones Newswires

June 28, 2009 19:01 ET (23:01 GMT)

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