Hometrack Reports Fall of UK House Prices Begins to Slow

According to the most recent numbers from Hometrack, house prices in the UK have started to decline less this month. This report is being viewed with further optimism about the housing market and the recession.

The average cost for homes in Wales and England only fell by 0.3 percent during the month, and only 32 percent of postcode districts reported price falls in comparison to the 59 percent seen in February, said Hometrack. Plus, there was also a rise in the number of agreed sales by 15 percent, while many possible buyers registering with estate agents rose by 6 percent for the month and 32 percent for the last quarter.

However, despite the positive figures, Hometrack has warned that there may be no widely based recovery for the housing market with people buying their first homes. They said that the fall of house prices likely reflects the increased optimism of estate agents on the back of increased market activity for the first quarter of the year. They did say, though, that the rise of sales has been driven by the buyers of family homes and cash investors who had big equity stakes in their other properties.

Richard Donnell, the Director of Research at Hometrack, said that while the increase in sales volumes and demand is real, it is essential not lose sight of the bigger picture. The volume of sales is set to be below half the level of normal market conditions, he continued. The need for first-time buyers in driving the market is underestimated much of the time, Donnell added, and many people are constrained by affordability and unable to access mortgage financing.

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