House price surprise fall

Published:  09 March, 2010

LONDON: House prices grew last month at their slowest pace since August with property coming on to the market growing faster than the number of new buyers, a survey indicated on Tuesday.

The Royal Institution of Chartered Surveyors said its monthly house price balance dropped to +17 in February from a downwardly revised +31 in January, a much bigger fall in the seasonally adjusted index than economists expected.

Jeremy Leaf, RICS spokesman said: "Most market indicators are still positive and consistent with further house price increases. However, the magnitude of the gains going forward is likely to continue to ease reflecting the fact that new supply coming onto the market is starting to outstrip fresh demand."

February's decline is the sharpest one-month fall in the balance since April 2008, and masks a big regional variation in house price trends. Prices fell in Wales, northern England, Yorkshire and Humberside and the West Midlands, but continued to rise sharply in London, southern and eastern England and in Scotland.

House prices have risen around 10 percent from a five-year low set in the first half of 2009.

High street sales were also lacklustre. The British Retail Consortium reported sales up 4.5% last month compared with a year earlier, while stores open for at least a year saw sales rise 2.2%. But the figures were artificially strong because shops were hit by heavy snow a year before.

Stephen Robertson, director of the BRC said: "Consumer confidence is certainly up on this time last year but, with unemployment rising again, spending plans are falling," said "When the weather-related distortions are stripped away, it's clear customers are still cautious."

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