U.K. house prices fell for a third month in December as a lack of mortgage finance prevented buyers from making a purchase, research company Acadametrics Ltd. and LSL Property Services Plc said today. The average price of a home in England and Wales declined 0.2 percent to 222,827 pounds ($354,000) from November, they said in a report issued in London today. Values rose 2.9 percent in 2010. Previously reported monthly price gains for October and November were revised to declines as more transaction data became available. The U.K. housing market has weakened as the prospect of the biggest government budget squeeze since World War II and tighter lending conditions hurt demand. Hometrack Ltd. said on Jan. 12 that banks won’t increase mortgage lending this year as tougher regulation and a lack of funds curb access to credit. “With many sellers still reluctant to transact and many buyers being unable to get a mortgage, we have a market which is much reduced in transaction terms,” Acadametrics Chairman Peter Williams said in the report. There is a “real possibility that we will see at best a flat market for the next year or two.” The Acadametrics report showed the number of transactions probably dropped 5 percent in December to 53,000 from the previous month. That’s a decline of 33 percent from a year earlier. London Prices The Bank of England kept its emergency stimulus unchanged yesterday after recent data suggested the economy slowed in the fourth quarter. Policy makers held their bond-purchase plan at 200 billion pounds and their main interest rate at a record low of 0.5 percent. Home prices fell 0.2 percent in both October and November, Acadametrics said, revising estimates it published on Dec. 10. In London, values rose 0.1 percent to 381,285 pounds in November, the month with the latest available regional data. “While average house prices are falling, the steady rate of the decline indicates a degree of resilience in the market,” Richard Sexton, director of property-appraisal business e.surv Ltd., part of LSL, said in the report. “However, if prices begin to tumble more quickly, the specter of negative equity could have a significant impact on buyer and lender confidence.” Acadametrics combines initial housing transaction data from the U.K. Land Registry and results from other price measures to produce an estimate for the most recent month. That number is then revised in following months.

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