2:00PM New York, 7:00 PM London - U.K home prices increased 2.3% in January, slowest price increase since June 2006.

Stocks in London tumbled after a report showed that U.K home prices rose slowest since June 2006. Also the Office of National Statistics reported today that households spent 50 pounds more on costs associated with their property in 2006 at 600 pounds a month.

In London trading FTSE 100 fell 1.36% or 80.1 to 5,788.90.

Of the 102 FTSE stocks 20 gained, 77 declined, and five were unchanged. Taylor Wimpey Plc led decliners with a drop of 5.22% as supply of new homes for sale plummeted 4.6% for the month in January.

Other homebuilders fell as well. Wolseley Plc lost 4.04% and Hammerson lost 2.36%.

Home Price Monthly Survey

According to a home market survey released by Hometrack Limited, home prices increased at a slower pace in January, a decline in rate for the fourth month in a row.

House prices fell for the fourth month in a row in January with average values falling by 0.3%, the same decline as last month. The growth in January from a year ago declined to 2.3%, which represents the lowest rate of growth since June 2006.

The average time to sell a property reached 8.5 weeks, the highest level since the survey began in 2001.

But the extent of price falls decreased over January, with agents reporting prices down across less than a quarter (23%) of the country, compared to 30% in December.

Family Spending Survey from ONS

UK households spent an average of £143 a week on housing-related costs in 2006, according to analysis in Family Spending, published today by the Office for National Statistics.

The ONS calculation is based on a comprehensive definition of housing and its related costs and includes £52 a week spent on mortgages, £24 on council tax, water charges and other local taxes and service charges, £23 on housing alterations and improvements and £17 on rent, net of rebates and benefits.

Housing costs now account for an estimated 19% of average household income.


UK Stocks
Of the FTSE 100 stocks London Stock Exchange led advancers with a rise of 2.14% followed by gains in Johnson Matthey of 1.82%, in Land Securities of 1.60%, in ICAP Plc of 1.45%, and in Intercontinental of 1.25%.

Taylor Wimpey led decliners in the FTSE 100 stocks with a drop of 5.22% followed by losses in Anglo American Plc of 4.83%, in Shire Plc of 4.30%, in Wolseley Plc of 4.04%, and in Sage Group Plc of 3.82%.

Retailers also fell on speculation that consumer spending will decline. Kingfisher shed 3.03% and Sainsbury edged down 2.47%.

Merger News

The Sunday Times reported in yesterday’s edition that the Brazilian government might block the $80 billion planned merger between Xstrata and CVRD. CVRD is the largest iron ore mining company in Brazil and one of the three large mining companies in the world by market capitalization.