By Svenja O’Donnell March 9 (Bloomberg) — A U.K. house price gauge showed fewer increases in values last month than economists forecast as more people tried to sell their homes, a sign the property market may be running out of steam. The number of real-estate agents and surveyors saying prices rose exceeded those reporting declines by 17 percentage points, the Royal Institution of Chartered Surveyors said in an e-mailed report today. Economists predicted 30 points, according to the median of 13 forecasts in a Bloomberg News survey. “The magnitude of the gains going forward is likely to continue to ease, reflecting the fact that new supply coming onto the market is starting to outstrip fresh demand,” Jeremy Leaf , spokesman for RICS, said in a statement. Britain’s housing market recovery has lost momentum this year with the election looming, an increase in transaction tax and colder-than-average winter weather. Bank of England policy maker Kate Barker said yesterday that the economic recovery may be on track, though it might face a “bumpy” path. New instructions outpaced new buyer inquiries in February, with a balance of 15 percent more surveyors reporting an increase in homes for sale, RICS said. Banks’ reluctance to lend is making it difficult for many Britons to acquire property. Banks granted 48,198 loans to buy homes in January, the least in eight months, Bank of England data showed on March 1. First-Time Buyers The proportion of first-time buyers who expect to enter the property market in the next 12 months fell to 25.8 percent in the first three months of the year, the third quarterly drop in the measure, Rightmove Plc said in a separate report today. “First-time buyers play a crucial role in keeping the market moving by helping to complete chains and their continued absence delays any prospect of a meaningful market recovery,” Miles Shipside , Rightmove’s commercial director, said in a statement. Prime Minister Gordon Brown ’s Labour Party and the opposition Conservatives are battling to convince voters they can steer Britain’s economic recovery while cutting its budget deficit , the biggest since World War II. The Conservatives had a 5-point lead in a YouGov Plc poll for the Sunday Times published on March 7. Gross domestic product rose 0.3 percent in the final three months of 2009, ending the deepest recession on record. The economy will expand 1 percent this year and 2.5 percent in 2011, while extra tax increases or spending cuts of 20 billion pounds ($30 billion) are needed by 2013 to close Britain’s fiscal gap, PricewaterhouseCoopers LLC said in a separate report today. “There are grounds for optimism from recent data that the recovery is broadly on track,” Barker said in a speech yesterday. “I don’t think it is yet possible to be confident in the pace of recovery and still expect the path to be bumpy. But some of the severe downside risks have diminished.” Retail sales rose last month, with sales at stores open at least 12 months rising 2.2 percent from a year earlier, compared with a 1.8 percent drop in the same month last year, a British Retail Consortium survey released today showed. To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net .
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U.K. Housing Gauge Shows Fewer Price Increases Than Forecast in February
