No spring boost for London property market

London

LONDON property asking prices slumped for a seventh straight month as sellers held off putting their homes on the market, according to British home-listing website Rightmove.

The company's March 2018 report showed that asking prices declined 0.6 per cent from a year earlier, with the number of newly marketed properties falling 3 per cent.

Prices rose 0.6 per cent from February, a smaller-than-usual jump at the start of the spring season, it said.

Falling values are "bound to be a deterrent to some potential sellers", said Rightmove director Miles Shipside. "Even though fewer properties are coming to market, the slower rate of sales means stocks of unsold property are growing, leading to subsequent downward price pressure."

The decline may be welcome news for some after years of rampant inflation have pushed ownership out of reach for many in the capital. The mean London asking price this month was £631,651 (S$1.17 million). Nationally, the picture was less dismal with asking prices increasing 1.5 per cent in March from February, after "strong demand" from home movers in the first two months of the year.

The average price of £304,504 is up 2.1 per cent year-on-year. That compares with gains of about 6 per cent seen less than two years ago.

Even so, concerns about the outlook for the UK as the nation prepares to split from the European Union are keeping economic activity subdued, according to the British Chambers of Commerce.

While it raised its growth forecasts - to 1.4 per cent this year, from 1.1 per cent, and to 1.5 per cent in 2019, from 1.3 per cent - the BCC said the economy will remain among the worst performing in the Group of Seven until at least 2020.

"Despite the upward revisions, our latest forecasts suggest that the UK is set for an extended period of sub-par growth - a damning indictment of the state of the UK economy given the rapidly improving global growth outlook," said Suren Thiru, head of economics at the BCC.

Real earnings will remain negative until 2019 although inflation has likely peaked and will begin easing in the near term, the report said.

The rate of consumer price gains probably declined to an annual 2.8 per cent, according to economists surveyed before the Office for National Statistics publishes February data on Tuesday.

The BCC predicts Bank of England policy makers - who announce their latest decision on Thursday - will raise rates next quarter, followed by another increase in the first quarter of 2019. BLOOMBERG