Average house prices have fallen by 7.3% year-on-year as the latest figures for October registered a 1.3% drop, according to a new report from Hometrack. Nearly three quarters of the country saw price falls in October with the largest declines regionally seen in London and the South West.

‘Weak consumer confidence continues to undermine demand for housing with a 35% fall in the number of applicants registering with agents over the last 6 months,’ said Richard Donnell from Hometrack. ‘The supply of homes for sale has started to shrink in recent months as some homeowners take their properties off the market but the scale of the decline in demand means prices remain under constant downward pressure.’

Consumer confidence is still weak, the report found, although there is a sense that vendors are more willing to price realistically for the market to break the stalemate between sellers and buyers in the market which developed over the past twelve months.

After five months of falling sales volumes, the latest survey highlights a 5.4% increase in the number of sales agreed over October i.e. property going under offer. ‘This could be early evidence that vendors are finally starting to accept lower offers from purchasers after what has been a year-long stand off,’ states the report.  

‘The re-pricing of the housing market tends to be a drawn out process that can take three to four years,’ continued Mr Donnell. ‘However, the sheer scale of the fall in transactions over the last year means that agents will want to engineer an improvement in volumes in the market.  The only way this can be achieved is to encourage vendors to be more realistic on pricing.  The unprecedented events of recent months are likely to encourage vendors to accept lower prices much faster than they would normally have done.’