House prices nudged up for the second month running, by just 0.1% this month, but slowing growth in demand and rising supply is set to reverse the price trend, Hometrack reported this morning.

Separately, the British Bankers Association said that just 31,888 mortgages were approved for house purchase last month – the lowest figure since April 2011.

Outside London and southern England – where prices roses 0.3% and 0.1% respectively – prices were either static or falling, Hometrack said.

Hometrack also reported a slowing of demand, with a 2.1% rise in new applicants – half the level in March – compared with a 4.8% rise in property listings.

While sales agreed rose by 10.1% this month, this compared with monthly rises of 35.7% in February and 13.2% in March.

With supply now up by almost 19% in the last three months, Hometrack said that if April’s pattern of a slowdown in demand and rising supply continues, there will be an impact on prices.

Hometrack director of research Richard Donnell said: “The impetus for price rises over the last two months has been higher demand – buyer registrations are up almost 25% over the last three months.

“This is largely explained by the recent ending of the Stamp Duty holiday combined with the usual upturn in demand associated with the spring buying season.

“The impact of these drivers of housing demand is starting to dissipate… If April’s slowdown in demand and rising supply continues over the coming month, we will begin to see a reduction in the upward pressure on prices.”

He added: “The short to medium-term outlook for prices hinges on the outlook for demand.

“Conflicting reports over the strength of the economy and renewed fears over the prospects for the Eurozone could, over the coming months, impact on buyer confidence. As a result, we expect price rises to flatten out as we move into the summer.”

According to Hometrack, average time on the market is now 9.3 weeks, with an average of 11.1 viewings per sale. However there are significant regional variations, with a property in Greater London taking just 5.3 weeks to sell, compared with 12.8 weeks in Wales and 12.7 weeks in the East Midlands.

A separate survey, by portal FindaProperty, says asking prices in the UK have gone up by 1.8% since the start of the year – and in London by 5.4%. The average asking price stood at £221,387 at the end of March.

Introducer Today Monday 30th April 2012

People are growing in confidence about the housing market, two new surveys have claimed. A third survey separately pinpoints growing optimism among first-time buyers.

Halifax said this morning that 39% of respondents to its 'Housing Market Confidence tracker' poll believe house prices nationally will increase next year – almost double the proportion that believe they will go down.

A similar poll by property portal Zoopla says that 67% of British home owners expect house prices to rise over the next six months. The average property price across Britain is expected to rise 3.9% between now and October.

The Zoopla poll also says that people are now finding it easier to get a mortgage than at the end of last year, with 17% saying availability has improved. However, in the Halifax poll, 25% think that lack of mortgage availability is a major obstacle to home buying, and 45% think that raising a deposit is a serious problem.

Both the Zoopla and Halifax polls reported highest confidence among home owners in London, where house prices are expected to rise by 5.5% in the next six months, according to Zoopla.

The Halifax survey says that most people still think of it as a buyers' market: 55% think now is a good time to buy, more than double the 24% who believe it is a good time to sell.

The Halifax poll also finds that nearly two-thirds of people (61%) are worried about job security, citing this as the major potential threat to the housing market.

In the third poll, from the Post Office, aspiring first-time buyers were asked about their plans. Of those who plan to buy within the next five years, 14% expect to buy this year, and 22% next year.

Almost half (45%) are confident of being able to fund the deposit themselves by saving up, while 16% will get help from their parents and the same proportion plan to use the Government's FirstBuy scheme.

Introducer Today Wednesday 25th April 2012

Inflation is likely to exceed projections made in the Bank of England's most recent inflation report, the latest minutes from the Monetary Policy Committee has revealed.

The fall in consumer price index (CPI) inflation to 3.4% in February had been welcomed by the MPC, but was less than expected.

The Monetary Policy Committee believes high oil & gas prices, a lower inflation decrease and duty changes in the Budget means inflation in the short-term will rise higher than recent projections.

"The speed at which inflation would return towards target could not be judged with any precision and there were risks on both sides," it adds.

The MPC warned the upside risk was that elevated inflation might be more persistent than expected and its commitment to achieving a 2% rate might be questioned.

The committee voted unanimously to maintain the base rate at 0.5% and the £325 billion asset purchase scheme. One member, David Miles, sought to increase the asset purchase scheme to £350 billion.

Fundweb Wednesday, 18 April 2012

The International Monetary Fund (IMF) has revised up its global growth forecast after saying prospects are “slowly improving again”.

In its April 2012 World Economic Outlook, the Washington-based lender predicts the global economy will expand by 3.5% during 2012, up from 3.3% in its previous forecast. The outlook for 2013 has been lifted from 4% to 4.1%.

The UK’s 2012 growth was increased from 0.6% to 0.8%, while 2013’s was held at 2%. The eurozone is expected to shrink by 0.3% this year, less than the 0.5% contraction previously thought, before growing by 0.9% the following year.

Meanwhile, growth in the US was revised up from 1.8% to 2.1% this year while 2013’s is up from 2.2% to 2.4%. China is now predicted to expand by 8.2% in 2012, up from 8.1%, and by 8.8% in 2013.

Olivier Blanchard, chief economist at the IMF, says: “Our baseline is that growth is going to be slow in advanced economies; sustained, but not great, in emerging market and developing economies.

“But the risk of things turning bad again in Europe is high.”

Fundweb Tuesday, 17 April 2012