Housing market 'faltering'

3:36pm Wednesday 23rd January 2002

HOUSE prices may still be rising but the number of property sales has significantly fallen in the past year, according to a leading finance expert.

Figures released by financial information company, Experian, show that north west London has seen a 12 per cent drop in average sales during the past year, from 8,970 in 2000 to 7,846 in 2001.

This echoes the trend across London as a whole, where the volume of sales fell by between 13 and 16 per cent last year, and shows that while some buyers are still prepared to pay top prices for the right property in the right area, others are prepared to wait and hold on to their money.

Bruno Rost, spokesman for Experian, believes the figures, which include sales up to last October, indicate a housing market that is 'showing signs of seriously faltering' and predicted that prices would start to fall back this year.

He said: "While prices are going up, this level of declining sales is unsustainable in the long term suggesting that prices may well have peaked in certain areas.

"At best, we could be moving to a patchy buyers' market, at worst to a marginal correction and period of plateau. Expect to see more 'reduced prices' and 'under new instruction' notices in estate agents' windows by the summer."

Andrew Long, a partner at Adams estate agents in Northfields Avenue, Ealing, agreed that the number of sales had fallen in recent months but said that the situation was improving.

"There are a lot of buyers out there looking and they are tempted by the cut in interest rates, but there is still a lot of uncertainty in the market. People are unsure what it is going to do," he said.

Some mortgage lenders, such as Natwest and Alliance & Leicester, have reacted by opting to ask for higher deposits from buyers to avoid a repeat of the situation a decade ago, when falling prices and lost jobs cost many borrowers their homes.

But others are confident that the market will remain stable. Martin Ellis, the Halifax's group economist, described the market as 'more fragmented than a decade ago', and said that buyers had become 'more discerning'.

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