House prices in July saw a slight increase, according to the latest data, but a survey of sentiment in the housing market showed that supply is outweighing demand.
The index of UK house sales for July, published by the Land Registry on 27 August was followed by the Hometrack survey of agents and surveyors on 30 August predicting a fall in prices into the Autumn.
The Land Registry published data showed an increase of 0.4 per cent in the value of houses compared to the previous month and an annual increase of 6.7 per cent. The greatest rise in prices was in the South West, with the highest fall recorded in Wales.
The figure for the number of house sales in May rose by eight per cent to 49,412 compared to May 2009.
The Hometrack survey found that prices in August had fallen, attributed to a fall in demand by -2.2 per cent, which followed a trend of decreasing demand over the last five months.
Richard Donnell, Director of Research at Hometrack, a property analysis business, said: “The housing market is in the process of a modest re-pricing that is likely to run for the next 6 to 12 months.
This follows a period of 18 months over which house prices have firmed rapidly on the back of a potent mix of rising demand and a chronic lack of housing for sale.”
Donnell said the firmer prices and the abolition of Home Information Packs had resulted in a surge of properties coming on to the market.
Creating some consensus around the Hometrack survey for August was the Royal Institute of Chartered Surveyors (RICS) who said the lettings market remained buoyant during the second quarter of 2010.
Between April and June, tenant demand increased across all regions of the UK, which RICS put down to difficulty in securing mortgage finance, worries about a ‘double dip in housing’ and the large deposit required by lenders.
The trend in the lettings sector is that demand is greater than supply, driving-up rents.
The supply of lettings property did continue to fall in the three months to July but at a slower pace, while the latest RICS Housing Market survey showed that the stifled demand from buyers could cause moderation in the price of renting as more homeowners opt to let rather than sell.
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