[NYTr] Booming Brit Economy: UK's 12-year Housing boom is over

[All the News That Doesn't Fit]

Financial Times - Sep 14, 2007
http://www.ft.com/cms/s/0/5c2ac6e2-62bc-11dc-b3ad-0000779fd2ac.html

Housing data hint 12-year boom is over

By Jim Pickard, Property Correspondent

The long-forecasted end to Britain’s 12-year housing boom is drawing
closer, new figures showingshowing a 2.6 per cent drop in house prices
in September seemed to suggest Friday.

A survey by Rightmove, the property website, showed the average asking
price in the UK was £235,176; down from £241,474 in August.

The fall was exacerbated by a drop in the number of four-bed homes
coming to market, which some blame on the introduction of home
information packs for large houses.

But it may also indicate a wider slowdown after five rises in interest
rates and the turmoil in bond markets had pushed up the cost of
mortgages.

Commentators are likely to wait for official government data before
concluding that prices are definitely falling.

However, the Rightmove data adds to a more gloomy picture of the state
of Britain’s housing market.

The average property sat on the market for 86 days, compared to only 70
in May, according to Rightmove’s figures. The number of properties for
sale per estate agent has also risen; from 52 in December to nearly 66
today.

The figures came only a day after the Royal Institution of Chartered
Surveyors (Rics) published a survey that showed sentiment among estate
agents had soured.

Rics said the Rightmove survey could, if anything, “understate the
negative sentiment which has hit the housing market in recent days”.

Oliver Gilmartin, senior economist at Rics, said indices tended to lag
the market during housing slowdowns.

Rightmove attributed the fall in its index in part to the introduction
of Hips, which sellers of large houses now have to pay for. But Miles
Shipside, commercial director, acknowledged interest rates and the
credit squeeze had also damaged sentiment.

The boom had probably reached the peak, he said.

Asking prices in London were down by 2.5 per cent; the south-west down
4.1 per cent; and the south-east 3.3 per cent.

The fall was less marked in other regions such as the West Midlands,
down 0.9 per cent, and Wales, down 0.2 per cent.

There were also striking variations within London where there have been
fears that some prices could be affected by falling expectations of
City bonuses as a result of market turmoil.

Kensington and Chelsea saw monthly growth of 0.7 per cent but asking
prices tumbled by 7.8 per cent in Brent and 7.7 per cent in Camden.

Copyright The Financial Times Limited 2007