Bloomberg News

U.K. November House-Price Index Increases on Demand, RICS Says

December 13, 2011

Dec. 13 (Bloomberg) -- An index of U.K. house prices climbed in November from a four-month low because of an increase in demand, the Royal Institution of Chartered Surveyors said.

The gauge by London-based RICS rose to minus 17 percentage points from minus 24 points in October, the group said in an e- mailed report today. It was forecast to decline to 25 points, according to the median of 10 forecasts in a Bloomberg News survey. A separate report by recruitment company Manpower Inc. showed the outlook for jobs is the weakest for two years.

“It is encouraging that buyer interest has edged upwards in the face of the endless diet of negative news from Europe and the turmoil in financial markets,” RICS spokesman Alan Collett said in a statement. “However, a meaningful recovery still seems some way off.”

While record-low interest rates and a shortage of homes for sale are supporting values, the housing market is struggling to gain momentum as the threat of a return to recession looms and inflation erodes household finances. Prices will rise or fall by no more than 2 percent as the balance between demand and supply leaves the market without direction, mortgage lender Halifax said yesterday.

Out of the 11 U.K. regions RICS tracks, London was the only area to record an increase in values in the past three months. A gauge of price expectations for the next three months was unchanged at minus 21.

A measure of new buyer enquiries, an indicator of demand, was unchanged at 7 in November. It was the third month the gauge was above zero, indicating an increase in enquiries. An index showing the number of new property listings rose to 10 from 3.

“Prices are holding up, but external factors such as euro- zone woes and fears of looming recession are impacting demand,” David Wakeford, a surveyor at Drivers Jonas Deloitte in London, said in the report. “Price drops may be inevitable in 2012.”

Manpower’s report into U.K. employers’ hiring intentions showed companies were evenly divided on whether they would increase or cut staffing numbers in the first quarter, the weakest result since the last three months of 2009. The reading indicates the labor market is “flat-lining,” according to the recruiter, which surveyed 2,100 employers.

--Editors: Andrew Atkinson, Fergal O’Brien

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net

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


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