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UK property prices stagnate amid fears over fiscal squeeze

Market in England and Wales fails to pick up, with number of would-be buyers falling 10pc

PUBLISHED : Wednesday, 30 January, 2013, 12:00am
UPDATED : Wednesday, 30 January, 2013, 4:07am

UK house prices stagnated this month and the number of new buyers looking for homes fell as concern over the euro-zone debt crisis and the impact of the government's fiscal squeeze hit demand, Hometrack said.

Prices in England and Wales were unchanged from December, after declining for the previous six months, the property researcher said in a statement.

The number of new buyers registering with agents fell 9.9 per cent from a month earlier, while the number of properties listed for sale fell 6.8 per cent.

A lack of houses and apartments for sale has supported prices, offsetting the fall in demand. Data last week showed Britain's economy contracted more than forecast in the final quarter of last year, raising prospects of the first triple-dip recession in its history.

"Fears over Europe, the economic outlook, the impact of austerity, lower incomes growth and mortgage availability have, over the last two years, weighed heavily on demand and kept pricing under general downward pressure," Richard Donnell, director of research at Hometrack, said. "Housing demand remains sensitive to the impact of external factors on consumer confidence."

On the year, house prices fell 0.3 per cent, Hometrack said. But 79 per cent of real estate agents were more optimistic about the prospects for the UK market over the next few months.

In London, values rose 0.3 per cent, as global uncertainty boosted demand for homes in the centre of the capital.