British house prices were unchanged last month, according to property researcher Hometrack, which said downward pressure on prices would continue amid a squeeze on consumers.
From a year earlier, values fell 1.6 per cent in January, the London-based firm said in a report yesterday. Gauges of new properties coming on the market and demand both declined, and the underlying trend was one of tightening supply and weakening demand, it said.
The UK economy shrank 0.2 per cent in the fourth quarter as inflation, rising unemployment and the euro-area debt crisis dampened consumer spending. Bank of England Governor Mervyn King said last week that consumers faced a ferocious squeeze last year and the recovery was likely to be long and uneven.
"Demand remains constrained by the uncertain economic outlook," said Richard Donnell, director of research at Hometrack. "The net effect will be a continued negative balance between supply and demand, pointing to further downward pressure on prices in the months ahead."
Demand for houses dipped 11 per cent in the second half of last year, while the supply of property for sale fell 7 per cent, the most since 2009, Hometrack said.
