In England, housing prices suddenly began to fall

The recession restrains the demand for real estate in the UK. As a result, housing prices decreased in July for the first time in 2012 and, according to experts, may continue to fall.

The reduction in prices in July amounted to 0.1% relative to the previous month, the housing demand indicator demonstrated the maximum reduction in six months, Vesti Economics report with reference to Bloomberg.

“The weakening of demand for houses in the summer months was expected, but in comparison with the previous years, the seasonal decline began earlier and was faster,” said Richard Donnell, director of the research unit of Hometrack. According to him, the current situation reflects growing fears regarding the prospects of the British economy and the deepening of the European crisis.

Housing prices in July decreased in eight of the ten regions of Great Britain relative to the previous month, prices have not changed in one of the regions, and only in London the growth of 0.1%was recorded.

Regarding July last year, a decline in real estate prices amounted to 0.5%.

The index of new registered buyers, which is an indicator of housing demand, fell 2.1% in July compared to the previous month, the cost of real estate for sale increased by 1.4%.

According to Donnell, the difference between the offer and demand "should increase in the summer months, and we can expect a further moderate reduction in housing prices."

The number of new buyers in London decreased in July by 2.4%, the most significant fall was recorded in Southeast England - 3.4%.

GDP of Great Britain decreased in the II quarter of 2012 by 0.7%, which became the maximum fall over 3 years.