London Property Prices Stable

Against an uncertain economic and financial backdrop the housing market has – over the last three years - adapted to a low turnover, finance constrained environment.House prices have fallen consecutively for the last 16 months, but on a year-on-year basis are down just 2.3%.

Demand has fallen for the last four months in a row but there has been no significant acceleration in price falls. This is at odds with consumer confidence which has - over the same period - fallen considerably.Low turnover and increasing realism on pricing among sellers looking to move before Christmas, are supporting the headline indicators of housing market activity.

2011 looks set to register the lowest level of housing turnover for 40 years - a trend which Hometrack expects to continue into 2012.New property listings failed to grow over the last quarter. In November listings fell by 0.8%.

Demand fell by -2.2% and is likely to continue to fall in the run up to Christmas. With the supply/demand balance in negative territory Hometrack expects to see an acceleration in price falls in the months ahead.

The average time on the market rose slightly to 9.9 weeks while the proportion of the asking price achieved remained relatively unchanged at 92.5%.

Across the country falls were registered in 32% of postcodes. The greatest pressure is in the South West, East Midlands, Wales and North West where prices fell by over 0.3% over November.

In London prices remain unchanged for the second month in a row but looking head it is unlikely that London will escape the impact of the continued turmoil in the financial markets. When prices start to fall in the capital so the scale of headline price falls will start to accelerate.

London again emerged as the only UK region to maintain its house prices, edging up 0.3% month-on-month as investors look to shore up their assets by purchasing London properties as investments. London, cautioned estate agent Lucy Pendleton, talking to the Daily Telegraph, is not immune from macroeconomic insecurity and the upward trajectory in property prices may not last:

"With this latest house price data, Londoners have had a major reality check. The capital is not immune to the collapse in business and consumer confidence - and the unravelling of the eurozone.