We are still witnessing a continuation of the trend of falling house prices, although the fall in supply of housing stock did go some way towards supporting prices in December. The biggest problem at present is a fall in transaction levels made worse before Christmas due to poor weather conditions. The increase in some areas of the country of demand over supply has helped to raise levels of optimism amongst certain professionals. The biggest rise in confidence levels has been in London and the South East whereas prices continue to fall within Scotland, Northern Ireland and North of England.
The lack of credit and rising unemployment seem to be the main cause of a fall in demand. Although the unemployment rate remained at 7.9%, the number of people out of work rose by 49K to almost 2.5m over the three months to the end of November. Job insecurity and with the announcement today of a fall in growth suggests that unless we see a sudden change in Government Policy it is unlikely that this snapshot of the Housing Market is unlikely to change in the immediate future.