LONDON (MNI) – Despite increased demand and rising sales volumes,
UK house asking prices fell 0.1% on the month in March and dropped 3.2%
on the year, marking the steepest rate of price deflation since October
2009, according to housing intelligence group Hometrack.

The volume of sales agreed grew 12.6% over March following a 25.4%
increase in February. However, this figure comes off a low base. Adverse
weather and the seasonal slowdown which characterised December and
January resulted in low levels of sales agreed, Hometrack warned.

London registered its first increase in prices for 8 months on the
back of rising demand and dwindling supply. Central London was the
primary driver of a 0.2% increase in prices across the capital,
Hometrack said.

In addition, the relative strength of the London market flattered
the monthly number, with the survey recording price falls across all
other regions in March with the exception of the South West where prices
remained unchanged, Hometrack said.

The proportion of the asking price being achieved suggests that
underlying pricing levels remain weaker than a year ago, Hometrack
added.

The measure fell over the final half of 2010 from 94% to 91.9% as
demand cooled and prices adjusted down to a level where transactions
could take place, Hometrack said.

Over the last 2 months it has bounced back to stand at 92.7%, but
remains down compared to this time last year when it stood at 94%.

Commenting on the survey Hometrack Director of Intelligence Richard
Donnell says:

“The modest improvement in market sentiment over the last 2 months
– albeit largely confined to southern England – is largely a result of
increased sales volumes. The survey shows that the number of housing
sales agreed has risen by 38% over the last 2 months,”

“This increase is off a low base. For example provisional data
from HMRC shows that non-seasonally adjusted residential transactions
were down 30% in January compared to December. That said, rising sales
volumes show that demand exists and that pricing levels are at a level
where transactions can take place – this was not the case over the final
half of 2010.”

–London newsroom: 4420 7634 1624; email ukeditorial@marketnews.com

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