House prices decline for the third month in 2010

House price growth in London has fallen back to be more in line with the rest of UK.

Robert Bartlett, Chesterton Humberts’ CEO, comments:

“The UK property sector is made up of many discrete markets, each with individual characteristics, but at the moment, all of them continue to be characterised by a low level of transactions.  The market traditionally slows as we approach the holiday season but this year, Christmas seemed to have arrived in many parts of the country in September.  

“The Poll of Polls shows a slight dip in house prices and although there is no sign of any dramatic downturn in values, vendors keen to sell need to ensure their properties are well priced in order to attract interest. 

“Lack of finance continues to hold back the market in our post boom economy. Banks remain very cautious in their lending and for many mortgages are just simply not available. This has led to the rise in the numbers of “accidental landlords”. Vendors, unable to sell, are now finding themselves becoming landlords to take advantage of the tighter lettings market.”

“We do expect the volume of transactions to increase again in 2011, with subdued growth in house prices, as the mortgage market starts to recover. Buyers will continue to expect value for some time to come.”

Douglas McWilliams, Chief Executive of CEBR, comments:

“Despite Bank of England base rates remaining at 0.5% for over a year, in October mortgage interest repayments were up 5.3% over the year on the retail price index. This suggests that banks have been edging up the cost of mortgages. We expect a reversal in this trend, with a fall in mortgage interest rates spreads of around 100 basis points in 2011 in conjunction with a relaxation of lending terms. A reduction in mortgage interest spreads and increased willingness to lend on behalf of banks and building societies should stimulate the housing market’s latent demand.”

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