Prices to fall in 2013, says Hometrack

Twenty percent of postcodes registered an increase in prices over 2012, up from 12% in 2011.  But price falls were recorded across 66% of the country.  Average house prices ended the year slightly down (-0.3%) in the 12 months to December, compared to a 2.3% fall over 2011.

The underlying trend of house prices falling in more areas than rising has been established for the last two years and they expect this trend to continue over the year ahead. 

During December prices fell by -0.1%, the sixth consecutive month in a row prices have decreased.  The seasonal slowdown saw buyer registrations fall (-4.8%) and property listings drop (-3.1%). The time on the market and proportion of asking price achieved ended the year at 9.7 weeks and 93.2% respectively.

Prices in London grew across 70% of postcodes in 2012, up from 42% in 2011.  Across the rest of the country there has been a clear north/south split in areas registering price rises over 2012.

In London the average time on the market is now six weeks (6.5 weeks a year ago). Improvements in this lead indicator have also been seen in the midlands, northern regions and south.Prospects for the London market will have an important bearing on overall house price growth in 2013.  Prices in the capital are now 10% higher than they were at the peak of the market (2007).  It is expected that price growth in London will moderate over 2013 with prices rising by 2%.

Affordability constraints and an unwillingness by households to take on debt will continue to act as a drag on the housing market in 2013. Hometrack expect transactions to total 912,000 in 2013 with the average household moving the equivalent of once every 25 years.