Bloomberg News

U.K. House Prices Were Little Changed in May, Acadametrics Says

June 09, 2011

June 10 (Bloomberg) -- U.K. house prices remained little changed in May as concerns that the economic recovery may falter damped buyer confidence, research company Acadametrics Ltd. and LSL Property Services Plc said.

The average price of a home in England and Wales was 223,971 pounds ($366,484), 20 pounds more than the April average, the groups estimated in an e-mailed report in London today. From a year earlier, values were up 1.1 percent.

The International Monetary Fund said on June 6 that the housing market remains “soft,” with Halifax reporting a day later that home values fell 0.1 percent last month. The Bank of England kept its benchmark interest rate at a record low of 0.5 percent yesterday, signaling the threat to the recovery from the government’s budget squeeze takes precedence over faster-that- targeted inflation.

“Economic uncertainty, fears over jobs, a squeeze on incomes and nervous mortgage lenders are keeping a lid on the housing market,” David Brown, commercial director of LSL, said in the statement. “It’s no wonder transaction volumes remain so very low.”

Out of the 10 regions Acadametrics and LSL track, eight posted declines in the past three months compared with a year earlier. Prices in London led gains, rising 7.4 percent. In April, values in the capital jumped 1.6 percent on the month.

Acadametrics Chairman Peter Williams said the gain in London was due to a “millionaires bounce,” before the government raised a tax on high-end properties. “We are not anticipating that London will experience a similar price growth in next month’s figures,” he said.

Acadametrics and LSL estimate the number of transactions in May was little changed from the previous month. In the three months through April, transactions fell 4 percent from a year earlier, with a 5 percent drop in London.

Acadametrics and LSL combine initial transaction data from the U.K. Land Registry and results from other price measures for an estimate for the most recent month.

--Editors: Simone Meier, Jennifer M. Freedman

To contact the reporter on this story: Fergal O’Brien in London at fobrien@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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