February sees property investments slip in the snow but prices should edge up
Added 02.03.10
Residential property investors saw the value of their portfolios slip in the winter snow during February with house prices falling by 1.0 percent month-on-month in February according to the latest figures from Nationwide.
But the company’s chief economist Martin Gahbauer believes the price decline may be a result of the snowy weather and expiry of stamp duty holiday and so it is too early to say whether February’s drop is the start of a new trend.
He said: “The price of a typical UK property fell by a seasonally adjusted 1.0 percent month-on-month in February, ending a strong run of nine consecutive monthly increases.
“The relatively smoother three month on three month rate of inflation remained positive at +1.6 percent, though this is down from +2.0 percent in January and a peak of +3.7 percent in September 2009. The average price of a typical property sold in the UK during February was £161,320.
“There is evidence from a range of indicators that the market may have lost momentum in early 2010 as the stamp duty holiday ended and house hunters were obstructed by the icy weather. New buyer enquiries dropped sharply in the New Year and there was also an associated drop in the number of new mortgages taken out by homebuyers in January. “At this stage, it is difficult to gauge how much of the drop in housing activity is attributable to one-off factors and therefore whether February’s fall in prices is just a temporary blip or the start of a new trend.
The Nationwide findings come at the same time figures were released by the Land Registry showing house prices did rise in January.
RICS chief economist Simon Rubinsohn said: “The data released by the Land Registry confirms that house prices did rise sharply in January. However, the Nationwide Building Society numbers for February cast some doubt on whether this trend can be sustained.
“While bad weather may have played a role in knocking both activity and prices this month, RICS believes that there shouldn't be too much emphasis placed on monthly volatility in the numbers.
“Interestingly, the Land Registry data continues to highlight significant regional variations in price performance with London very much at the top end.
Indeed, following the rise of 3.9 percent in January prices in the capital are now just 5 percent away from the 2007 peak.
“By way of contrast, the North East was the English region seeing the biggest fall in prices in January. In this area prices are 15 percent away from the high water mark. RICS expects prices in general to continue to edge upwards over the coming months although the picture is likely to stabilise in the latter part of the year as mortgage costs begin to increase.”
News feed courtesy of Residential Landlord