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UK Home Prices Drop, Buyers’ Outlook Improves

Home prices in the U.K. dropped by the most in seven months to open the second quarter of the year, indicating that tighter lending conditions may be holding back property demand, according to Bloomberg.

Home prices in the U.K. dropped by the most in seven months to open the second quarter of the year, indicating that tighter lending conditions may be holding back property demand, according to Bloomberg. On Monday, Halifax reported that U.K. house prices fell by 1.4% in April to an average value of £160,395, bring the year-over-year change to a 4.9% decline. In the three months to April, home prices were 3.7% below the same period one year earlier, while the current average home price is 4% above the April 2009 trough but 20 % below the peak values seen in August 2007.

Halifax economist MartinEllis cited “weak confidence amongst households, partly due to uncertainty over the economic outlook” as a key reason for lower housing demand. However he also pointed to tighter housing-market conditions, low mortgage debt servicing levels, and increased employment for a likely increase in home prices. Meanwhile, a separate report from Rightmove found that 33% of potential first-time homebuyers expect to see prices increase in the coming year, up from 22% in the January survey. The data could suggest that more Britons will enter the property market son to take advantage of low prices.

Click here to read the story on the Halifax report from Bloomberg.

Click here for coverage of the Rightmove survey from Bloomberg News.

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