'Zero growth' in house prices for first time in 19 months
Growth in house prices appears to have stalled, with a new survey showing that they have failed to rise for the first time in 19 months.Hometrack's monthly survey reveals zero growth was recorded during September, following monthly increases of 0.1 per cent in both July and August.Continued weakness in demand is one of the factors behind the recent loss of momentum, as well as a reduction in the level of pent-up demand, which previously drove the market and was supported by the launch of Help to Buy in early 2013. In the last three months, the balance between supply and demand has moved into negative territory, further reducing upward pressure on prices.A particularly pronounced slowdown is currently being experienced in London, which was the only region to record a price fall (of 0.1 per cent) during September. Further modest declines in prices are expected in the coming months.London and the south-east registered an increase in the time on the market (most marked in the capital). This bucked the regional trend, as in other parts of the country the time taken to sell has fallen as general market conditions have improved.Clear declines in the proportion of the asking price being achieved were also registered in London and the south-east, on weaker demand and longer sales times. Richard Donnell, director of research at Hometrack, said seasonal factors could be partly behind the slowdown in the market, although the trend has been in evidence since April 2014."Buyer uncertainty is growing in the face of a possible interest rate rise, a general election on the horizon and recent warnings of a house price bubble," he continued."The debate over economic implications for Scottish independence could well have added to the uncertainty in recent weeks."He added that a further drop-off in activity is expected during the next few months, with many homeowners not needing to sell and unlikely to do so unless it benefits them financially.
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