Lack of new buyers slows house price growth in December

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by Kay Murchie

According to housing intelligence group Hometrack, the pace of house price growth slowed in December due to a lack of new buyers.

The group said the number of househunters were down by 2.2% during the month, while the average cost of a home grew by just 0.1%.

According to Hometrack, house prices are now 1.9% lower than they were this time last year and the group is forecasting a further 1% fall in prices over the next year.

Richard Donnell of Hometrack said slow growth in household incomes and unemployment would curb demand next year.

Mr Donnell comments: “Unexpectedly buoyant demand and a chronic lack of housing for sale were the key drivers of the housing market in 2009.

“While a scarcity of housing is set to remain an important feature of the market in 2010, it is the prospects for demand that will dictate the outlook for prices in the next 12 months,” he adds.

Meanwhile, Jones Lang Lasalle believes that house prices could fall by 7% in 2010, while Savills predicts a 6.6% decline.

In comparison, the Centre for Economics and Business Research (CEBR) expects house price gains of between 2% and 4%.

Ben Read, managing economist at the CEBR, said: “We still expect house prices to be around 15% higher at the end of 2012 than today.”