UK House Prices: Tentatively Positive Signs Continue

The Land Registry released the figures for April from its house price index, and it concurs with the latest trend by showing that the rate of annual decline is continuing to slow. The annual rate of decline in April according to the Land Registry is 16.2%, in a month when prices in England and Wales fell just 0.3% according to the index.

The slowing annual rate of decline is widely thought to be occurring because there is a shortage of supply in the UK housing market at present. Some, including our own Liam Bailey are worried that the current positive news may lead the thousands of people holding properties off the market, to release them, which could tip the supply balance and cause the rate of decline to accelerate once again.

The Land Registry release also focussed on transaction levels, rather the fact that there was only half the transactions this February as there was last February. Considering that transactions had already declined sharply by last February and this becomes even more damming.

While some will view the slowing rate of house price decline, the only truly positive sign for the UK housing market will be a sharp incline in transactions. This will show us that finally significant numbers of vendors have realised that price drops are necessary to secure a sale, that unemployment and fears thereof may be easing, and that the banks are lending (though this will come as vendors become realistic about pricing).