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August 9, 2011 12:01 am
Britons were unwilling to buy or sell houses in July but spent a little more money on the high street, according to two closely watched surveys of the UK’s faltering retail and housing sectors.
House prices continued to slide, though at a slightly slower pace than the previous two months, according to a survey by the Royal Institution of Chartered Surveyors. Respondents also reported the lowest average number of sales over the past three months since the summer of 2009.
“With prices continuing to fall, many would-be sellers seem unwilling to lower their expectations and are reluctant to place their property on the market,” said Ian Perry of Rics. After an uptick earlier this summer, 7 per cent more surveyors reported a fall rather than a rise in houses coming onto the market.
Across the country as a whole, 22 per cent more said prices fell rather than rose. London remained in a different world, however. In the capital, 30 per cent more chartered surveyors reported that prices rose rather than fell.
Meanwhile, retailers saw a slight increase in sales in July after they used deep discounts to draw shoppers in. The total value of retail sales rose 2.5 per cent compared with a year ago, according to the British Retail Consortium’s retail sales monitor – higher than this year’s average increase of 1.9 per cent.
However, Stephen Robertson, director general of the BRC, cautioned that the survey’s figures do not strip out the effect of inflation or the rise in value added tax this year: “2.5 per cent growth effectively means people are buying fewer goods.”
Retail sales, which account for about a third of consumer spending, have been anaemic this year as inflation outpaces wage growth and leaves people worse off in real terms.
Retailers have reacted by increasing discounts and bringing forward seasonal sales, which helped to boost clothing, footwear and food sales last month. Supermarkets have put about 40 per cent of their products on promotion, compared with a normal level of about 20 per cent.
The surveys were conducted before the sharp declines in world stock markets last week. Helen Dickinson, head of retail at KPMG, said renewed financial turmoil could depress retail sales even more.
“I think the main driver is how much money people have in their pockets, but beneath that is how confident they feel about the outlook,” she said. “I might not necessarily curtail my day-to-day purchases, but that new kitchen or those new carpets or that new sofa . . . I might just hold back because I’m a bit more concerned now than I was this time last week.”
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