UK house prices continue to slide

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The time may now be right for landlords with rented property insurance looking to buy more houses and flats to get back into the market.

UK house prices have now fallen for the seventh month in a row, according to housing intelligence firm Hometrack.

Both buyers and sellers were in short supply as the average cost of a home in England and Wales dropped by 0.5% this month to stand at £153,600.

That figure is 2.2% less than in January 2010.

Hometrack’s research found a slowdown in both supply (-5.4%) – the largest monthly fall for four years – and demand (-9.5%).

Falling demand in particular is likely to impact on pricing levels over the first half of 2011.

In January 2010 demand stood at -2.7%, a sharp contrast to today’s figure of -9.5%. This suggests that the housing market is facing more fundamental underlying issues than the usual post-Christmas slowdown.

With recent rises in the cost of living, household budgets will only come under further strain if concerns over rising inflation translate into higher interest rates. Mounting concern over a possible interest rate rise will act as a further dampener on demand.

Hometrack said the supply of homes for sale was likely to dwindle further over the next two quarters.

Hometrack director of research Richard Donnell said: “There are no signs of a New Year bounce for the housing market, as 2011 begins with a sluggish start.

“The supply of new homes coming to the market continues to fall but it is the change in demand that we need to pay most attention to, as this will have the greatest impact on pricing levels in the first half of 2011.

“Concerns over the economic outlook and the biting reality of spending cuts are doing little to improve a fragile market defined by weak consumer sentiment and a lack of demand for housing.”

In the meantime landlords, whether their portfolio is large or just a single property, should always ensure that their investment is covered properly through landlord house insurance.

Discount Landlord Insurance provides a comprehensive range of policies to cover all your needs as a landlord, at the most competitive landlord insurance rates available.

31st January 2011