No Sign of Housing Market Crash
May 20th, 2008 by 
Guy
There is absolutely no evidence to substanciate a housing market crash despite average house prices remaining stagnent, says the latest edition of the Assetz House-Price Watch.
The firm bases its annoncement on the five major UK house price index that reveal an average of 1.7% annualised growth for the 12 months prior to April 2008.This is a 9.7% decrease from the April 2007 annual growth rate of 11.4%.
While the annual house price growth reduced a little in April, monthly house price data offers a different opinion.
Assetz says data showing last quarter average house prices reveals a steep rise throughout 2006 and into early 2007 but this is proving to be stable in 2008.
Considering the house price highs over last few years, the firm says this stabilisation is necessary, with typical annual rises of 10% or more not sustainable over the long term.
When looking at average house prices themselves, prices were just £458 lower in April than the January figure of £211,472.
As property prices have remained firm since the beginning of the year, with a current average of £211,014 in April, Assetz says there is no evidence of a market crash.
The average house price in April 2008, taken from the average price provided by all five major indices, showed a decrease of just £915, compared with the previous month’s average figure.
It also shows an increase of £2,279 in the 12 months from April 2007, when the average price of a home was £208,735.
Stuart Law, chief executive of Assetz, says: “While house prices fell by 0.6% in April, prices remain up on the previous year and I am yet to see any firm evidence of a housing market crash.
“We saw a steep increase in house prices leading up to a peak in October last year. This was widely regarded as an unsustainable level of growth and we are currently embedded in a period of stabilisation, throughout which house prices in this country have remained extremely robust in spite of the difficulties in the mortgage market.
“Over the long term, demand for housing will continue to outstrip supply and with government targets of three million new homes by 2020 now looking impossible, as a number of house builders announce a halt to new starts, this will support future house prices and rental growth.”
He adds: “The mortgage market problems, and to some extent the uncertainty over the housing market, is at present causing significant pent-up demand from first-time buyers and once the mortgage market frees up I expect this demand to return strongly.
“The effect of this release of demand back into the purchase sector will probably surprise many, supporting house prices and even causing them to grow again in due course.”
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