After a spell of moderation within the housing market in regard to house prices, London experienced a month in November of slightly falling prices.  Hometrack also published surprising figures which indicated the North and South divide was narrowing.  As far as rate of fall in house prices is concerned, favorable figures were released which were encouraging for the market as a whole.  Year on year deflation was slightly higher than 0.2%, resembling figures from the last few months of 2010.  This rate of deflation possibly indicates the housing market overall is gaining momentum heading into the New Year.

Housing prices is a prime indicator of health within the market.  Stabilization will typically not be declared in housing until a trend of rising house prices is constant over a 6 month period.  Low consumer confidence combined with the winter season will make it difficult for the housing market to continue ticking upward.  Even with factors working against the market, lenders have attractive mortgage as well as remortgage products to take advantage of.

Richard O’Donnell, Hometrack director of research, commented on the gap which exists between the North and South and the possibility that the two are beginning to approach each other, saying: “The gap between asking and achieved prices is closing in northern regions and this is reducing the downward pressure of pricing.”  

O’Donnell continued: “The slowdown in demand seen in the last five months has also been less pronounced in northern regions.”  Demand within the market is expected to resume ticking upward in the spring when the weather improves.