By Jennifer Ryan
Dec. 14 (Bloomberg) -- The U.K. housing market recovery will peter out in 2010 as the supply of homes increases because of forced sales, Rightmove Plc said.
Average asking prices will stagnate next year after rising about 2 percent in 2009, the operator of the U.K.’s biggest property Web site said in a statement today. Prices fell 2.2 percent this month to an average of 221,463 pounds ($361,405), and may drop again next month, the group said.
Banks may show “less forbearance” to consumers who are late on mortgage payments after the general election, which Prime Minister Gordon Brown must call by June 2010, Rightmove said. A shortage of properties available helped stoke prices this year and erased some losses in values caused during the slump.
“2009 turned out to be a good time to trade up,” Miles Shipside, commercial director of Rightmove, said in the statement. “We forecast the positive mood will continue into 2010 until the post-election hang-over kicks in.”
The pound was fell 0.1 percent against the dollar today to $1.6223 as of 9:13 a.m. in London. The two-year gilt was 2 basis points lower at 1.19 percent.
Asking prices fell 5.8 percent from November in the North of England, making it the worst-performing of 10 regions tracked by Rightmove. East Anglia, where prices rose 0.5 percent on the month, was the only area to show a monthly increase. Rightmove measured asking prices from listings on its site from Nov. 8 to Dec. 5.
100,000-Pound Drop
Prices in London fell 1.2 percent, led by a 6.2 percent drop in Hounslow. The next-biggest drop was in Kensington and Chelsea, the capital’s most expensive district, where prices declined 5 percent, or almost 100,000 pounds in a month.
The average number of properties available for sale per real estate agent fell to 67, the lowest since February 2008, from 69 the previous month, Rightmove said.
The Council of Mortgage Lenders cut its forecast for U.K. mortgage repossessions this year after low interest rates helped Britons manage their payments. The CML last month forecast 48,000 repossessions, down from an earlier prediction of 75,000.
Repossessions may increase from the second half of 2010 because banks may become less patient with as many as 240,000 homeowners who have been late on mortgage payments and if interest rates increase, Rightmove said.
Record-low interest rates have made borrowing more affordable and helped more U.K. households meet debt payments, the Bank of England said today, citing a survey it conducted with NMG Financial Services Consulting from September to October.
Still, Shipside said a jump in mortgage lending next year isn’t likely.
“We have seen recovery to a degree in mortgage lending, which is fairly a snail’s pace, and they are being particularly choosy,” Shipside said in an interview on Bloomberg Television. “I can’t see that changing particularly next year, it may even tighten up after the election.”
To contact the reporter on this story: Jennifer Ryan in London at Jryan13@bloomberg.net
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