U.K. house prices fall; consumer gloom deepens
LONDON (MarketWatch) - The British housing market continued to stagnate in June, while consumer confidence slipped neared an all-time low amid a darkening economic outlook, according to two separate surveys released Monday.
Hometrack's monthly house price survey found average prices dropped by 1% in June for the ninth consecutive monthly decline. Compared to June 2007, prices were down 3.2% and are off 2.5% since the beginning of the year.
Separately, the GfK NOP Index, a measure of consumer confidence, fell five points to -34, from -29 in May, and near the lowest level ever recorded. Confidence in the economic outlook over the next 12 months fell to a record low of -45 from -39 in May. GfK NOP, a consulting firm, conducts the survey on behalf of the European Commission.
The Hometrack survey echoed other studies that have found the number of housing transactions have shrunk as potential buyers stay away due to the credit crunch.
"New buyer registrations were down 5.7% in June and have now fallen by 52% since the start of the credit crunch," said Richard Donnell, Hometrack's director of research, in a news release.
"This drop in volumes was always possible as around half of all transactions in recent years have been driven by aspirational or non-needs-based movers who are now sitting on their hands," he said.
The drop in transaction volumes threatens to reach levels not seen since the 1970s, Donnell said.
The survey found sellers are now receiving 91.6% of their asking prices, down from 92.3% in May and the lowest level since the series began in 2001. A year ago, sellers were receiving 95.6% of their asking prices.
Meanwhile, it's no surprise consumers are growing increasingly gloomy about their economic prospects, said Rachael Joy, a member of the consumer confidence team at GfK NOP.
"With rising inflation, gloomy forecasts for interest rates and soaring fuel, utility and food prices dominating the front page headlines, it's no surprise that confidence in the general economy is almost in freefall," she said. "It seems unlikely that this trend will reverse in the near future."
Hometrack's monthly house price survey found average prices dropped by 1% in June for the ninth consecutive monthly decline. Compared to June 2007, prices were down 3.2% and are off 2.5% since the beginning of the year.
Separately, the GfK NOP Index, a measure of consumer confidence, fell five points to -34, from -29 in May, and near the lowest level ever recorded. Confidence in the economic outlook over the next 12 months fell to a record low of -45 from -39 in May. GfK NOP, a consulting firm, conducts the survey on behalf of the European Commission.
The Hometrack survey echoed other studies that have found the number of housing transactions have shrunk as potential buyers stay away due to the credit crunch.
"New buyer registrations were down 5.7% in June and have now fallen by 52% since the start of the credit crunch," said Richard Donnell, Hometrack's director of research, in a news release.
"This drop in volumes was always possible as around half of all transactions in recent years have been driven by aspirational or non-needs-based movers who are now sitting on their hands," he said.
The drop in transaction volumes threatens to reach levels not seen since the 1970s, Donnell said.
The survey found sellers are now receiving 91.6% of their asking prices, down from 92.3% in May and the lowest level since the series began in 2001. A year ago, sellers were receiving 95.6% of their asking prices.
Meanwhile, it's no surprise consumers are growing increasingly gloomy about their economic prospects, said Rachael Joy, a member of the consumer confidence team at GfK NOP.
"With rising inflation, gloomy forecasts for interest rates and soaring fuel, utility and food prices dominating the front page headlines, it's no surprise that confidence in the general economy is almost in freefall," she said. "It seems unlikely that this trend will reverse in the near future."
