Date issued: 28 Mar 2008

NO BOUNCE IN HOUSE PRICES THIS EASTER

• House price growth slows to lowest level in twelve years
• Clear change in consumers’ housing market sentiment
• Outlook more downbeat, but within forecast range
• MPC expected to bring rate cut forward to April

* seasonally adjusted

Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said:

“House prices fell for the fifth consecutive month in March. The price of a typical house fell by 0.6% during the month, bringing the annual rate of house price growth down to 1.1% - its lowest rate since March 1996. A clear change in sentiment since the late summer has led to the sharp slowing in house price growth, even in the less volatile 3-month on 3-month series. Prices on this measure are now 1.5% lower than three months ago. The price of a typical house in the UK is now £179,110, only £2,027 more than this time last year. However, prices are still 11% higher than two years ago and 47% higher than five years ago - the equivalent of a price rise of more than £30 per day for the last five years. "

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I have done a link so you can also see a full copy on

http://www.nationwide.co.uk/hpi/historical/Mar_2008.pdf

"House sellers are refusing to face up to the reality of the credit crunch by putting their homes on the market at unrealistically high prices, according to the latest survey from Rightmove.

Britain's largest property website warned that sellers, who are still asking for prices close to the peak of the boom early last year, need to price their properties more realistically now, rather than later in the year, if the UK is to stave off a stagnant housing market.

 It also called for urgent action from the Government to strengthen the funding markets and ease the credit crisis, which is preventing some people from getting a mortgage.

While sellers are initially asking for similar prices to boom times, deals are actually being struck at 10pc below peak boom prices, demonstrating that the gulf between the amount sellers want and the amount buyers are willing to pay is widening.

Rightmove said the average asking price was £239,655 in March, an increase of 0.8pc compared with the previous month. However, the annual rate of actual selling prices fell from 5.8pc to 5pc.

Miles Shipside, commercial director of Rightmove comments: "Most sellers coming to the market seem to be ignoring the increased competition from other unsold properties and the challenge buyers now face in obtaining a mortgage.

"As many of these sellers are likely to be buyers themselves, they seem to be trying to bank a higher figure for their home but want a bargain when they buy. It's human nature, but in the current market, sellers should price below their competition to achieve more interest now and avoid a larger price drop later in the year."

Rightmove said that the outlook is likely to worsen, as the excess of supply over demand is on course to worsen and the ongoing credit crunch leads to a further tightening of lending criteria, preventing some potential buyers from getting a mortgage.

According to Rightmove, of 10 regions across England and Wales, average prices fell in two - the West Midlands by 2.9pc and East Anglia by 0.6pc.

The CLG release details some of the findings of research by Ipsos MORI into the trials of HIPs carried out between November 2006 and April 2007, prior to their general introduction later in 2007. At the time the trials were heavily criticized as the publicity for, and cost of, the packs  to sellers, was subsidized by CLG to the tune of some £4 million pounds. None of the results of the trials were made public before the imposition of HIPs on the entire residential property market.

Head of SPLINTA, Nick Salmon, said today that the figures quoted in the CLG press release are being used to 'spin' the supposed benefits of HIPs and paint a thoroughly misleading picture of the reality of the packs in today's market.

"CLG say 72% of sellers were satisfied with HIPs in the trial. Of course they were, as the packs costs them nothing. I'm surprised it wasn't 100%. Apparently 79% agreed that trial packs contained 'everything expected'. That is a meaningless statement as we have no idea what those sellers were expecting. 81% understood the documents including the Energy Performance Certificate. An EPC graph could be understood by a child but I don't believe that many people would understand easements, covenants and wayleaves without professional guidance, so I question just which documents these sellers were supposedly understanding."

Salmon went on to highlight a glaring omission from the CLG release.

"I find it extremely telling that this release is absolutely silent on the matter of whether or not HIPs are actually having a beneficial impact on transactions times and fall through rates in property sales - which was the original goal before saving the plant took priority.  In case they have not got that far in their analysis of the trial, let me tell the Minister what is happening in the real world today. HIPs are doing absolutely nothing to hold sales together, nor are they cutting the time between acceptance of offer and exchange of contracts. Buyers don't want to see them, and sellers have no interest in them. If she does not believe me, I challenge her to spend a few days actually in estate agents' offices to see the reality for herself"

SPLINTA has campaigned against the Home Information Pack since 2001 and now has an online petition running on the Number 10 Downing Street website to try and head off a further change to the HIP legislation later this year. Nick Salmon thinks the Government has been taken aback by the massive public response to the petition and sees moves afoot to tarnish estate agents so that the aim of the petition fails.

"HIPs are unloved by the property industry and unwanted by the public. They will become even more unpopular in June when the Government plans to end the ability of a seller to go on the market immediately they want to. Our petition against the ending of this 'first day marketing' concession is in the Top 20 by size of over 7,700 such petitions on the Number Ten Downing Street website. The implication of the CLG press release is that estate agents are in some way responsible for the fact that buyers don't see a HIP. They don't see it because they are not interested in seeing it and the suggestion is a blatant attempt by CLG to create a reason for ending first day marketing. If it wasn't potentially so serious, it would be laughable"

ENDS

Further information and comment: Nick Salmon 07831 805455

Notes to Editors.

1. Currently the marketing of a property can begin as soon as the HIP is ordered but the Government intends to end this concession on 31st May 2008 and will require that the pack is physically complete before marketing commences. Campaigners argue that because HIPs take days to produce there will be delays for sellers wanting to sell quickly and the ending of the concession to begin marketing on the chosen first day is an infringement of the personal liberty to sell a property at will. The petition (http://petitions.pm.gov.uk/homeselling) has already attracted almost 9,000 signatures.

2. The SPLINTA (SELLERS PACK LAW IS NOT THE ANSWER) campaign is supported by over 1,900 firms of estate agents, surveyors and solicitor/conveyancers with some 4,000 offices in England and Wales. For more information please visit http://www.splintacampaign.co.uk

3. The CLG press release is here: http://www.communities.gov.uk/news/corporate/713987

SPLINTA

P.O. Box 398

Stevenage

SG1 9DR