Home prices in the U.K. have continued to decline as demand for mortgages remains low on the uncertain economic outlook, although prices in London are diverging from the rest of the country, according to Bloomberg. On Friday, Academetrics and LSL Property Services reported that the average price of a home in the U.K. dropped 0.1% in March from the previous month to reach £222,146, which is unchanged from the same time one year ago. Academetrics chairman Peter Williams acknowledged, “Housing market conditions are easing a little,” but said demand is low due to weak consumer confidence as austerity measures bite.
The report showed that prices in London jumped 3.7% year-over-year while all the rest of the 10 regions in the survey except Southeast England reported annual declines. David Newnes of LSL called the overall picture of the U.K. housing market “dynamic” and pointed to “The effect government spending cuts will have on unemployment in areas where a large proportion of workers are employed by the state,” as a major factor weighing on North England and Wales. Separately, Lloyds Banking Group advised that mortgages to first-time homebuyers could double if insurers protected banks against defaults.
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