No Spring Boost for London Property Market, Rightmove Says

(Bloomberg) -- London property asking prices slumped for a seventh straight month as sellers held off putting their homes on the market, according to Rightmove.

The March report from the home-listing website shows that asking prices declined 0.6 percent from a year earlier in March, with the number of newly marketed properties falling 3 percent. Prices rose 0.6 percent from February, a smaller-than-usual jump at the start of the spring season, it said.

Falling values are “bound to be a deterrent to some potential sellers,” Miles Shipside, Rightmove director, said in the report. “Even though fewer properties are coming to market, the slower rate of sales means stocks of unsold property are growing, leading to subsequent downwards price pressure.”

The decline may be welcome news for some after years of rampant inflation has pushed ownership out of reach for many in the capital. The mean London asking price this month was 631,651 pounds ($880,000).

Nationally the picture was less dismal with asking prices increasing 1.5 percent in March from February, after “strong demand” from home movers in the first two months of the year. The average price of 304,504 pounds is up 2.1 percent year-on-year. That compares with gains of about 6 percent seen less than two years ago.

BCC Forecasts

Even so, concerns about the outlook for U.K. as the nation prepares to split from the European Union are keeping economic activity subdued, according to the British Chambers of Commerce.

While it raised it growth forecasts -- to 1.4 percent this year, from 1.1 percent, and to 1.5 percent in 2019, from 1.3 percent -- the BCC said the economy will remain among the worst performing in the Group of Seven until at least 2020.

“Despite the upward revisions, our latest forecasts suggest that the U.K. is set for an extended period of sub-par growth -- a damning indictment of the state of the U.K. economy given the rapidly improving global growth outlook,” said Suren Thiru, head of economics at the BCC.

Real earnings will remain negative until 2019 although inflation has likely peaked and will begin easing in the near term, the report said. The rate of consumer-price gains probably declined to an annual 2.8 percent, according to economists surveyed before the Office for National Statistics is publishes February data on March 20.

The BCC predicts Bank of England policy makers -- who announce their latest decision on Thursday -- will raise rates next quarter, followed by another increase in the first quarter of 2019.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, David Goodman

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