The Good and The Bad
15 / Jun / 2009
Last week it was reported that house prices in England and Wales fell at their slowest annual pace in 1-1/2 years in the three months to May and completed sales hit a 9-month high in a sign the market may be over the worst. The Royal Institution of Chartered Surveyors' monthly house price balance rose to -44.1 last month, its best reading since November 2007, from -58.7 in April. Analysts had forecast a reading of -51.0. New buyer enquiries increased for the seventh month in a row and at their fastest rate since August 1999, RICS said. However, there were also fewer new homes being put up for sale. The number of completed sales per surveyor over the last three months rose to 11.8 from 10.6, the biggest monthly increase since April 2001 and the highest level since August 2008. The figures echo other recent indicators, suggesting house prices may be nearing a trough as people slowly regain the confidence to purchase a home and banks start lending again. Surveys from mortgage lenders Halifax and Nationwide both showed house prices rose last month, while approvals for new home loans, a leading indicator of house prices, have edged up in recent months but still point to hefty falls ahead. Contrary to the housing stats British retail sales fell in May, as stores struggled to match strong gains booked last year, last weeks survey by the British Retail Consortium showed. The BRC said like-for-like sales fell 0.8 percent in May compared with a year ago, while total sales, which include new floor space, rose 0.8 percent. That came after April's Easter-related rise in like-for-like sales of 4.6 percent on the year, the strongest gain in three years and a total sales increase of 6.3 percent. The BRC said last month's weaker turnout was partly due to effects from strong gains in May 2008. Like-for-like sales had risen 1.9 percent year-on-year in May 2008, taking total sales up 4.6 percent on the year. The month of May can be a busy month for retailers as two public holidays during the period mean people have more time to go shopping. But with Britain suffering its deepest downturn in three decades and unemployment soaring, people are not so keen to splash out even though some may have more spare cash because big interest rate cuts have reduced monthly mortgage repayments. Clothing sales were lower than a year ago, and footwear sales fell at their sharpest rate in a year, the BRC said. Back to good again, Industrial output rose for the first time in over a year in April after a jump in oil and pharmaceuticals production. Industrial output, which contributes 18% to GDP, rose 0.3% on the month the first increase since February 2008 and better than the 0.1% decline economists had expected.