House prices fall my £2,000 in a month: Average cost now £268,000 as falling demand and pre-election lull are blamed for the decrease
04-16-2015
- Average house price dropped 0.6 per cent between January and February
- Average price down from £270,000 to £268,000 in February
By Louise Eccles Business Correspondent For The Daily Mail
The average price of a house has dropped by £2,000 in a month and could slip further this spring before recovering.
Falling demand and a pre-election lull are blamed for the decrease of around 0.6 per cent between January and February.
While prices remain higher than 12 months ago, they have fallen across much of the country over the last six months. Average house prices were £268,000 in February compared to £270,000 a month earlier.
Price is right: The average price of a house has dropped by £2,000 in a month, from £270,000 in January to £268,000 in February
The UK experienced extraordinary price growth last year when buyers and sellers piled in to the market after years of delaying moving house following the 2008 recession.
The pent-up demand caused house prices to surge, but the rate of growth was seen as unsustainable and has since been reined in.
The Office for National Statistics said yesterday that the market was ‘starting to show signs of a slowdown compared to last summer across the majority of the UK’.
House prices were up 7 per cent across the UK in February compared to 2014, and 9 per cent in the capital. But this is almost half the rate of growth during the dizzy heights of last summer.
The slowdown in London means house prices are now accelerating faster in the East of England, where homes have soared 10 per cent in a year.
Falling demand and a pre-election lull are blamed for the decrease of around 0.6 per cent on the average house price in Britain between January and February
It is the first time in three years that any region has out-performed the capital. Experts said this was because London had hit an affordability ceiling, while the rest of the UK – and particularly the surrounding commuter belt – still had room to grow.
House prices may be falling but this home – so narrow a passer-by could easily miss it – will still set you back £750,000.
The period building sandwiched between its neighbours is advertised by Foxtons as well-proportioned, although most people would find the rooms rather tight.
The biggest room, a bedroom, is 8ft 8in wide, while the study is 4ft 11in wide. In all the two-bedroom house with a garden in Barnsbury, North London, offers 538 square feet of space over three floors.
The estate agents are banking on its location on a ‘highly desired’ tree-lined street not far from King’s Cross and St Pancras stations as well as Islington’s trendy bars and restaurants.
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The East of England, which includes the leafy counties of Hertfordshire, Suffolk and Cambridgeshire, is now pulling ahead of London, with the South East close behind.
Separate figures released by the Council of Mortgage Lenders (CML) show that lending to first-time buyers and home-movers has fallen to a two-year low.
The number of home loans handed to first-time buyers in February was just 18,700, the lowest since April 2013, while the number of loans for home-movers fell to 21,900, the lowest since February 2013.
Paul Smee, of the CML, said seasonal factors had played a part in dampening house purchase activity in February.
He added: ‘This typical seasonal trend may also be exacerbated by uncertainty ahead of the General Election, but we still expect to see an upturn in the spring and summer months.’
Mark Harris, of mortgage broker SPF Private Clients, said the mortgage market would start to pick up this spring ‘once election uncertainty is out of the way’.
Andy Knee, of property specialists Legal Marketing Services, said the housing market’s ‘tranquil mood’ is likely to continue into spring and a bounce back ‘now only appears possible following the outcome of the election’.