House prices rising faster at top of market

All nine English regions experienced rising house prices over the month to December 2009. In Wales, prices barely moved during the month, they remained flat in Scotland and continued to decline further in Northern Ireland.

House prices in the five most expensive local authorities (all in London) increased by an average of 1.8% between November and December 2009 while two of the five least expensive areas showed house prices falling month on month.

All of the four main property types – detached houses, semi-detached houses, flats and terraced houses – saw price increases over the month to December. This was the fourth consecutive month that prices have risen across all of the four types. 

The price of detached housing fell by 8.2% overall in 2009 compared to 2008. This is the shallowest fall of any of the four housing types and compares to double digit declines for the other three, with terraced housing registering the steepest decline of 11.6% year-on-year.

Robert Bartlett, Chesterton Humberts CEO, said: "The general outlook remains positive but as the Poll of Polls clearly shows, the top of the market is recovering more quickly than the lower end and there are significant regional variations.

"Having experienced local market conditions around the country in the past few weeks, this fractured recovery is all too apparent.

"Sales in the northern offices are progressing with greater price sensitivity than in London and the Home Counties, where generating instructions continues to be the challenge.

"Homeowners who would, in a more open market, be considering up or downsizing, are reluctant to commit to a sale as they are concerned about being able to purchase due to the continuing lack of financing and stock.

"As we predicted, asking prices fell in December. Earlier in the year, the continuing stock shortage in much of the country led to agents desperate for instructions giving unrealistic quotes to prospective sellers. The resulting asking price rise had nothing to do with the market and everything to do with inexperienced agents frantic for stock to sell."

Douglas McWilliams, Chief Executive of CEBR, said: "The housing market has bounced back off the bottom as lack of supply and increasing mortgage availability have combined to create a relative shortage. But we think that the higher prices will improve the supply conditions a bit in 2010 but disposable incomes will be squeezed, so that although we expect house prices on balance to continue to rise, they are unlikely to move up sharply. We very much disagree with the view that prices will drop, however – any such view ignores the underlying market position."

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