House price rebound wipes out drop

Source: Construction Digital

Date :15/10/2007 09:10:18

House prices rebounded by a strong 2.7 percent during September, more than wiping out the previous month's fall, figures have showed.

Property website Rightmove said the gain during the four weeks to October 6 was the strongest for six months and helped push the average price of a home in England and Wales up to £241,642.

At the same time annual house price inflation rose to 10.4 percent, compared with 9.6 percent in the previous four week period.

But the group said despite the rebound, the market continued to show signs of a slowdown, with the less volatile three-month growth rate dropping to 0.5 percent for the three months to October 6, the lowest quarterly rise since the winter of 2005, and down from an increase of 1.5 percent during the previous three- month period.

Rightmove said the recent sharp price fluctuations, which saw prices dive by 2.6 percent during August, before rising by 2.7 percent in September, were largely due to the "distorting effect" of the Government's controversial Home Information Packs.

The packs, which aim to speed up the house buying process by giving people more of the information they need up front, were introduced on August 1 for homes with four or more bedrooms and September 10 for ones with three bedrooms.

The group said there had been a surge of three-bedroom properties coming on to the market in order to beat the September 10 deadline, as homes marketed before this date do not need one of the packs.

At the same time there was a partial return of four-bedroom homes to the market, following a slump in the immediate aftermath of the introduction of the packs.

It said this had led to a higher proportion of larger properties coming on to the market, and as these tended to be worth more, it had pushed up overall asking prices.

The group said the global credit crunch had also given the market a shock at a time when it usually enjoyed a rebound after the quieter summer season. Properties are now taking an average of 85 days to sell.

October 15 2007

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