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House Prices: A British Obsession

A recent survey has shown that Brits are still obsessed with property prices, despite the current financial recession.  The sheer accessibility of data on the internet is the main driver for this passion with those aged between 24 and 35 being the most obsessed age group.  The poll also found that around 70% of the people polled still looked at property online even when they had no intention of moving.

The survey of 1,399 subjects found that, on average, people spent 55 minutes per month looking at property online.  One in ten logged on to find out how much their property was worth and 12% used the internet to find out how much friends and neighbours’ houses were worth.  One in twenty of the homeowners polled confessed that they were also checking up on the value of colleagues’ homes.

In the most active age group of 24 to 35, eight out of ten regularly looked at online property without any intention of buying – often for the reason of checking up on the value of other peoples’ homes.  Of this age group, 63% said that they looked out of sheer curiosity and 29% said that they wanted to gauge a good time to move.  The average age of the first time buyer is now in this age group, coming in at 34.

The data comes at a time when economists are predicting better things to come.  They reckon that the end is in sight, but there will be little price growth until 2013.  The Centre for Economics and Business Research said that improved conditions suggested that house prices had a further 8% to fall but would rise by 6% in 2010 and 2011.

House Prices Fall Again in April

Economists latest predictions came at a time of some volatile price index figures as Nationwide stated that house prices had fallen by 0.4% in April, whilst the Halifax said they had fallen by a much greater 1.7% during the month.  If that’s not confusing enough Nationwide’s figures show the average house price going up by £915 despite reporting a 0.4% fall in prices.  This is down to the dark art of seasonal adjustment; in a nutshell – house prices did not rise by as much as expected during the average month of April, so the figure is adjusted to show a net loss.

Despite assurances from the likes of Nationwide that the decline is slowing (the three-month rolling comparison down by 3.1% in April, compared with 4.1% in March and 4.8% in February), prices are still going down at a time when traditionally, the spring homebuying instinct kicks in.  More good news for the market comes in the shape of the latest Hometrack study which shows that house prices are falling at their slowest rate for more than a year.  The Royal Institute of Chartered Surveyors (RICS) were also upbeat about the state of the market, pointing to further interest from potential buyers and the sales to stock ratio indicating a possible price stabilisation later this year.

However,  even with house buyers and investors snapping up ‘bargain’ homes, it is far too early to be talking about the ‘green shoots of recovery’ that have already been mentioned in certain quarters.  The fact remains that the economy is still in a dreadful mess, unemployment is rising and banks are still on very shaky ground.