Home prices and transactions have fallen, again, for the fourth month in a row in the UK and Ireland. Buyers are sceptical and not buying until they know what the future holds. Many are holding out to ride out the current wave of uncertainty.
The number of property related transactions in England, Northern Ireland and Wales dropped in December to 132,000 transactions, which is down from 146,000 transactions in November. This is according to HM Revenue and Customs.
Home values have also dropped here. In England and Wales, the average price of a home dropped. A home here now costs £174,700, which is a 0.3 per cent drop over December.
Another important consideration is the length of time it takes to sell a property. That number rose to 8.5 weeks, which is the longest time in the history of the survey, which was conducted, which dates back to 2001. Some property investors consider the length of time a home takes to sell a true indicator of the housing market.
Most economists believe that the housing slump in these regions is due to a lack of consumer trust in the housing market. Buyers are holding out until they can determine which way the market is going. Some are waiting until rates drop and the values fall low enough to get a true bargain.
The Bank of England is likely to cut its benchmark lending rate on 7 February when it meets. The policy makers will have a difficult time cutting the rate as consumer spending is dropping and inflation is beginning to climb faster.
