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UK Home Asking Prices Unchanged
Submitted by Tradervox 2 on Mon, 21/05/2012 - 12:27
Tradervox (Dublin) - According to Rightmove plc, the asking prices for home in UK were unchanged in May as the political turmoil and debt crisis in Europe and the end of tax breaks for first-time home buyers lowered the demand for houses.
According to a report by Rightmove, the average asking price for homes in UK remained at 243,759 pounds making it the first time since 2002 the prices have failed to rise in May. The demand for houses has fallen since the end of tax exemption for first time buyers in March 24. To compound the situation, the turmoil in Europe has resulted to a declining consumer confidence.
Speculation that Greece will exit the 17-nation trading bloc has escalated despite G8 leaders pushing the country to remain in the monetary union. According to Miles Shipside, who is a commercial director at Rightmove indicated in the report by the company that Greece default would cause a reduction in mortgage availability as well as lessen the consumer confidence in the region hence causing more potential buyers to shy off from the housing market. The report also showed that the number of properties coming into the market dropped by 10 percent from April.
The report also suggested that the market has lost momentum which will be a concern for forex traders which might see the sterling pound weaken further through the week. A slowdown in the housing sector is expected due to the coming bank holiday as well as the Olympic Games which will be held in August.
According to the Chief Economist at Lloyds TSB, Patrick Foley, household finances in UK are still under pressure despite an expected inflation decline. He added that the weaknesses in the broader economy are likely to affect consumer confidence. In a report, Lloyds TBS indicated that the inflation continues to outpace wages hence hampering the consumer spending power.
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