House prices begin to stabilise

House prices in the UK dipped for the eighth consecutive month in February, new figures suggest.

14:49 28 February 2005

House prices in the UK dipped for the eighth consecutive month in February, new figures suggest.

But property research company Hometrack found that the annual gain has slumped to just 0.3 per cent, the lowest since the survey began three and a half years ago.

House prices fell 0.2 per cent on the month to 162,500, the smallest decrease since August last year, and an indication that the market may be stabilising as interest rates remain on hold at 4.75 per cent.

According to Hometrack, sellers achieved a larger amount of their asking price last month, the first increase since April. The average price that a home sold for as a percentage of the asking price was 93.9 per cent, up from 92.7 per cent in January.

The report also said new buyers registered with estate agents rose 28.5 per cent in February, after falling 12.8 per cent in January.

"A more stable interest rate outlook, ongoing low unemployment and rising household incomes will all help support rising prices," said Hometrack economist John Wriglesworth.

"Commentators forecasting a housing market crash will soon have to revise their forecasts.'

House prices fell 0.4 per cent in January, according to Hometrack, and the company predicts no change in property prices through 2005. Mr Wriglesworth forecasts a small monthly gain in house prices in March.