U.K. October House Prices Gain for Third Month, Hometrack Says

U.K. October House Prices Gain for Third Month, Hometrack Says


Nov. 2 (Bloomberg) -- U.K. house prices rose for a third month in October as increased demand for homes and a lack of properties for sale pushed up values, Hometrack Ltd. said.

The average cost of a home in England and Wales climbed 0.2 percent from September to 156,400 pounds ($258,000), the London- based property-research company said in an e-mailed statement today. House prices fell 4.2 percent from a year earlier.

“The last six months has seen a continued improvement in housing market sentiment on the back of rising demand and a lack of housing for sale,” said Richard Donnell, director of research at Hometrack. “Prices have firmed and the discount between sales and asking prices is back to the same level it was at the start of the credit crunch over two years ago.”

Buyers are returning to the property market after home values dropped as much as a fifth from their 2007 peak and interest rates fell to a record low. With the economy still in recession, most economists expect Bank of England policy makers to extend their 175 billion-pound bond-buying program next week.

Nationwide Building Society said last week that home values posted their first annual gain in 19 months in October. Lenders granted 56,215 home loans in September, the most since March 2008, according to the Bank of England.

House prices in London gained 0.4 percent in October, the most of any region surveyed, followed by the southeast and northwest of England where prices rose 0.2 percent, Hometrack said.

The number of new buyers registering with estate agents grew at an average 1.1 percent rate over the past three months, slowing from an average 7.5 percent in the spring and early summer, Hometrack said.

‘Starting to Fade’

“Pent-up demand that has boosted the market in recent months is starting to fade in the face of firmer pricing and fewer clear bargains,” Donnell said. “Slower growth in demand could well reduce the upward pressure on prices in the coming months.”

Bank of England policy makers may expand their money- printing plan to 225 billion pounds after the economy unexpectedly contracted in the third quarter, the median of 48 forecasts in a Bloomberg News survey shows. They may leave the benchmark rate at 0.5 percent, say all 60 economists surveyed.

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