Optimism rises in housing market

House prices were flat across England and Wales in January following six months of falls

House prices were flat across England and Wales in January following six months of falls

First published in National News © by

The housing market started 2013 in "better shape" than it has done in either of the previous two years, property analysts have said.

Four out of five (79%) estate agents are more optimistic about the market this spring than they were a year ago, although this is mainly driven by a belief that sales will pick up rather than house prices increasing, research by Hometrack said.

It added that this spring will be a "key test" of whether households are able to act on the recent signs of improvement in the housing market following Government efforts to unblock lending.

The latest study found that house prices were flat month-on-month across England and Wales in January following six months of falls. Around 16% of postcodes saw prices fall in January, representing a big slowdown in falls compared with the previous two months when around 27% of districts recorded decreases.

London, which has consistently outperformed other areas, was the only region to see an uplift in prices, with a 0.3% increase. Prices were flat over the month in the East Midlands, the North West, the South East, the South West and the West Midlands. They fell by 0.1% in Wales, Yorkshire and Humberside and the North East and by 0.2% in East Anglia.

Of the estate agents who feel more optimistic about the housing market, improvements to the mortgage situation and a "growing realism" among sellers about pricing were among the main reasons.

Compared with a year ago, the average percentage of the asking price achieved has risen in all regions but two - the East Midlands and the North West. Across the country, the typical percentage of the asking price achieved was 93.1% in January.

Richard Donnell, director of research at Hometrack, said: "Despite the slow start, the housing market looks to be in slightly better shape than the start of the previous two years.

"After the initial downturn in 2008, and the modest bounce-back in 2009/10, the housing market has been struggling to arrive at a point where pricing appears stable and there is broad alignment between what buyers are prepared to pay and sellers are prepared to accept for their home."

The study regularly asks around 6,000 estate agents and surveyors about achievable selling prices in their area. Lenders and surveyors have previously said that they expect sales to pick up this year amid improvements to the mortgage market following the introduction of the Government's Funding for Lending scheme.

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