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Housing market hit by threat of war with Iraq

The property market is stuck in price stagnation as supply rises and the threat of war with Iraq deters people from moving, according to the Hometrack survey.

Its February report on house price inflation shows that the London market remains flat, with the average house price sticking at £233,200 for the fourth month running.

Ten London boroughs reported a fall in average prices in February.

In Islington, the average value fell by 0.5 per cent to £263,493 from £264,817 and in the City, the average price dropped by 0.4 per cent to £311,939 from £313,191.

Across the UK as a whole, Hometrack says the average house price increased slightly by 0.1 per cent to £135,800 from £135,664, continuing the nine-month decline in inflation since its monthly peak of 2 per cent growth last May.

The survey says supply is outstripping demand, with estate agents reporting a 19 per cent rise in the number of properties registered in February while the number of buyers rose by 18 per cent.

Hometrack housing economist John Wriglesworth says: “Continued uncertainty and worries over the course of possible war with Iraq cannot be positive for the housing market. I do not expect to see any significant increase in the market until a resolution to the present conflict is apparent. The recent 0.25 per cent reduction in the bank base rate is a snowflake off the iceberg of negative news emanating from the housing market.”

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