New figures from the Royal Institution of Chartered Surveyors (RICS) show house prices fell in November - although the drop wasn't as fast as October's slide, Clear Property Investment reveals.

The number of newly-agreed sales were also down from 14 to 12 per cent - for the second month running. And the ratio of sales to properties for sale fell to 14.8 per cent from 15.2 - the lowest reading for more than a year.
Manufacturers meanwhile enjoyed rising prices by 0.9 per cent.

Simon Hayes, an economist at Barclays Capital, interpreted the data as a weakness of sterling - which also appears to be boosting export demand - that was behind higher prices.

"Its effect on consumer goods price inflation will depend on the extent to which producers pass on these costs to consumers, which so far has been significant," he told FT.com.

In a speech earlier this week, Charlie Bean, deputy governor of the Bank of England, referred to the relationship between the weaker pound and inflation.
Inflation, he said, had been far above what the Bank's monetary policy committee had forecast.

Even if the causes were not to be long-lasting, he revealed, there was still a high possibility that general expectations of rising prices would, in the long-term, alter the long-term trend of prices and wages.

"But given the unexpected strength of inflation in recent months, this risk [of rising inflationary pressure] has probably increased of late," he said. "So we shall be watching these indicators, and their impact on wages and prices, like proverbial hawks."

* Meanwhile, the UK will escape a double dip recession - according to the Council of Mortgage Lenders (CML).
But high unemployment and reluctance to spend would result in fewer houses being bought.

Interest rates are expected to remain at current levels for the whole of 2011 while house prices will stay more or less stagnant, according to a CML forecast for 2011.
The predictions are in line with those of private lenders who have watched the rise in house prices slowly fall towards the end of the year.

Property sales, according to the CML, are expected to remain flat at 860,000 while the number of people whose homes are repossessed is expected to rise from 36,000 this year to 40,000 in 2011.

For further information on property investing or forecasting for 2011 contact any of our Clear Property Investment team.

 

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