There was a small fall in the house prices of 0.1% in March, according to the latest Hometrack housing market survey.
But although this was the ninth consecutive fall in house prices it was also the smallest decrease recorded for sixth months and follows a three-month trend of reducing price drops.
All signs now point to the end of house price deflation, says Hometrack, with prices expected to level out for the remainder of the year. Average House prices now stand at £162,300 down from a peak of £167,000 in June 2004.
Activity has again increased this month, with sales agreed rising by 16.5%. Hometrack says this is partly due to a further increase in the number of buyers registered with estate agents and a decrease in the amount of time it is taking to sell a property down to 7.4 weeks from 7.6 weeks in February. This is only the second time the number of buyers registered with estate agents has increased since May 2004, says Hometrack.
With buyers come back into the market, the discounts being offered on asking prices have also decreased for the second month running. March saw the average sales price as a percentage of the asking price reach 93.4% up from 93.3% for February.
Twenty-two counties saw price rises or remained static while 35 saw house prices fall. Those areas that saw increases included central London and the City (0.8%), Derbyshire (0.8%), North West London (0.8% and North Wales (0.4%). Those areas recording price decreases included Northumberland (1%), South Yorkshire (0.9%), Cambridgeshire (0.9%) and North Lincolnshire (0.8%).
Among the cities 28 saw price rises or remained static while 26 saw price falls. Derby (1.8%), Bradford (1%), Hull (0.7%) and Portsmouth (0.4%) all saw price increases while Lincoln (2%), Cambridge(2%), Gloucester (1.9%) and Plymouth (1.8%) all recorded decreases.
John Wrigglesworth, housing economist for Hometrack, says the survey shows house price deflation looks set to be coming to an end. “An increase in the number of buyers, helping boost the number of sales agreed, point to a much stronger market in the coming months. Buyers are no longer getting the discounts off the asking price they were earlier in the year, again suggesting the market is improving,” he says.
Wrigglesworth adds that following the results of the latest survey Hometrack has risen its forecast for house price growth for 2005 from 0% to 3%.IFAonline
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