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Monday, 25 November, 2002, 12:01 GMT
House price forecasts slashed
House prices in London will fall next year while the outlook for the rest of England and Wales will also see a change, a key property market survey has said.
It said it now believed London house prices would drop 5% in 2003 - a dramatic revision of its prediction last month that prices would rise 7% next year.
Hometrack's report, while salutary reading for homeowners in the capital, also has wider relevance - London house prices are often said to anticipate and drive national trends, although the peaks and troughs can be greater.
National forecast cut
Hometrack said its view on London reflected growing concern over the state of the capital's economy and, in particular, the health of the labour market in light of increasing job losses among financial sector workers.
London house price falls could also have a knock-on effect on prices elsewhere, and Hometrack said it was halving its forecast for 2003 national house price growth to 4%.
In May, monthly prices jumped by 2.5% but Hometrack said the pace of increases had weakened every month since.
Overall price rises averaged 0.2% nationwide in November, down from 0.5% the month before.
"House price rises have continued to moderate following unsustainably high rises over the summer," said Hometrack chief economist John Wriglesworth.
The slowdown in price rises was caused by falls in the cost of homes on the market at more than £1m in London and South East England.
But Hometrack sees no sign of a crash in the housing market.
Mr Wriglesworth said a combination of low interest rates, high employment and rising incomes was continuing to sustain healthy housing demand in most parts of the country.
He added: "We expect this to continue into 2003."
"The notable exception is Greater London which, having seen the greatest house price rises over the last two years, is beginning to suffer from the effects of unemployment worries not least due to the ever increasing number of City job losses."
In London, prices fell in November, though the picture varied in different parts of the capital, with the steepest falls in the most expensive areas.
In central London and the City, which are among the most expensive areas, prices fell by 1%.
Prices in West London dipped 0.5%, while in Southwest London they declined by a more modest 0.2%.
The biggest house prices rises in November were in Suffolk and Norfolk, with 0.7%, followed by North Wales, Teesside and Nottinghamshire with 0.6%.
House price change by region
Prices increased by 0.4% in November, bringing the average price to £120,806.
It is taking 4.9 weeks to sell each property. But there has been a fall in the number of registered new buyers, down 4.3% in November. After Greater London, this is the second highest fall out of all major regions in England and Wales.
The average property is £90,739. It is taking just 3.6 weeks to sell a property in this region - and there are eight viewings per sale.
This region has the lowest number of viewing per sale out of all the regions in England and Wales. It takes only 6.6 viewings before a property is snapped up.
The average property costs £101,138.
The average property price is £85,584. The number of new properties on the market has fallen by 1.8%. Properties are selling fast. It takes only 2.9 weeks to sell a property in this region.
Sellers are getting 98.6% on average of the property's asking price.
The average home now costs £86,049. The number of sales agreed during November has risen by 2.5%, and the number of new properties that are listed on the market has fallen by 0.3%.
On average prices are achieving 96.6% of their asking price.
The number of viewings is the lowest out of all regions in England and Wales - just 6.6 per sale.
The average home now costs £175,854, with the average detached home fetching £275,102.
Sellers are having to drop their prices. On average the sale price is 95.1% of the asking price. There are fewer buyers looking - down 5.5% during the month.
The average home now costs £82,075. It is taking on average 9.7 viewings per sale and 4.1 weeks to sell a property. Buyers are paying on average 97.7% of the asking price.
Despite an increase of 8.1% in the number of sales agreed, sellers are having to reduce their prices by the highest amount.
On average buyers are paying only 93.6% of the property's asking price.
Sellers are getting the best prices for their properties out of all regions in England and Wales. On average buyers are dropping their prices by only 1%. It is taking only three weeks to sell a property - and 8.2 viewings per sale.
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