By Svenja O’Donnell - Dec 14, 2010 7:30 PM GMT+0800
U.K. Housing Gauge Stayed Close to 18-Month Low November
The number of real-estate agents and surveyors saying prices fell exceeded those reporting gains by 44 percentage points, compared with minus 49 points in October. Economists Photographer: Chris Ratcliffe/Bloomberg
A U.K. housing-market gauge stayed close to the lowest in 18 months in November as demand for homes waned, the Royal Institution of Chartered Surveyors said.
The number of real-estate agents and surveyors saying prices fell exceeded those reporting gains by 44 percentage points, compared with minus 49 points in October, the London- based group said in an e-mailed report today. Economists forecast a decline to minus 50 points, according to the median of 16 predictions in a Bloomberg News survey.
“Fear over how future spending cuts will impact on the jobs market are clearly still weighing heavily on potential purchasers’ minds, with many deciding to ‘wait and see’ until the new year,” RICS spokesman Ian Perry said in a statement. “Meanwhile, the lack of mortgage finance continues to deter first-time buyers.”
Recent data have shown a mixed picture of the housing market. While the Bank of England kept its benchmark interest rate at a record low this month, making loan repayments cheaper, mortgage approvals fell to an eight month-low in October. Consumers are also bracing themselves for the deepest spending cuts since World War II, leading to the loss of 330,000 jobs.
A gauge of new buyer enquiries dropped to minus 18 in November from minus 12, RICS said. A measure showing the number of new property listings was unchanged at minus 4.
An index of prices in London was at minus 32 percent in November, compared with minus 49 percent the previous month.
‘Downward Spiral’
“The housing market is only a shadow of itself in 2007,” Jeremy Dell, a real-estate agent at JJ Dell & Co. in Shropshire, England, said in the report. “The economics indicate a long downward spiral.”
The U.K. has at least seven indicators of the housing market, which have shown divergence in recent months. Acadametrics Ltd. and LSL Property Services Plc said on Dec. 10 that house prices increased to the highest in more than two years in November. Mortgage lender Halifax said prices fell 0.1 percent that month, while the Department for Communities and Local Government said today that prices declined by that amount in October.
Banks are still curbing credit. Lenders granted 47,185 loans to buy homes in October, compared with 47,369 in September, the Bank of England said on Nov. 29. That’s less than half the level at the peak of the housing boom in 2007.
Still, the number of mortgage holders in arrears fell 11 percent in the third quarter from a year earlier, the Financial Services Authority said today. The increase in the number of new arrears cases is also easing. There were 36,600 such cases in the quarter, a drop of 19 percent on the year.
The central bank’s Monetary Policy Committee last week left its benchmark interest rate unchanged at a record low 0.5 percent and its emergency bond-purchase plan at 200 billion pounds ($317 billion).
To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net
To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net
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