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House prices remain steady

publication date: Jul 9, 2009
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Hometrack’s June survey finds that rising sales volumes, a dwindling supply of housing for sale and a continued increase in demand are underpinning pricing levels which have remained unchanged for the last 2 months.

Commenting on the survey, Richard Donnell, Director of Research at Hometrack said, “A lack of supply and rising demand have combined to prop up house prices in the last 2 months. Over the last 6 months, the volume of buyers has grown by 36%, this compared to a 6.4% increase in the number of homes for sale. In London, the increase in demand for housing (+52%) has been almost tenfold compared to the growth in the supply of homes for sale (+5.6%).”

A key driver of improving market sentiment – and talk of green shoots – is the continued pick up in sales. The latest survey shows that volumes were up in June by 4.6%, the fifth month in a row.

Since the start of the year sales have risen by over 80%, albeit off a very low base.

Richard Donnell says: “The jury is still out as to whether the momentum gained over the spring and early summer can be maintained for the rest of the year. The two key risks for the market are either a renewed weakening in demand or a surge in the volume of housing for sale. Given the uncertain outlook for the economy it is the demand side where the greatest risk lies as many would-be buyers continue to remain cautious or are unable to obtain sufficient equity or finance to access the market.”