The third month of house price falls has been confirmed by Hometrack, the property research company, as the supply of properties on the market increases and buyers exit the market, with the number of buyers registered with estate agents falling by 5% over the month.
According to Hometrack’s September survey, average national house prices have fallen by 0.3%. The price of the average UK home now stands at £166,800.
The report has also highlighted other symptoms of a more downbeat market. Agreed sales over the month have fallen by over 5%, while the average sales prices achieved as a percentage of the asking price fell for the fifth month in succession to 94.5%. Properties are also spending longer on the market, with the average time rising to 5.8 weeks in September, up from 4.8 weeks in July.
However, thanks to the strong economy, competition between mortgage lenders, and low borrowing costs, Hometrack expects the market to stagnate or ‘modestly deflate’ rather than crash.
The turnaround seems to have affected the whole of the country, with just five counties – Teeside, South Lincolnshire, Nottinghamshire, North Yorkshire and North Wales – out of 57 reporting price rises.
The weakest performing areas were all in the south, especially the South East, with Surrey, West London and East London showing the largest price falls.
John Wriglesworth, Hometrack’s Housing Economist, said: ‘Rising interest rates and reducing consumer confidence in the future health of the housing market have taken their toll for the third month running. We have reduced our house price forecast for 2004 to 3%, and expect 0% for 2005. The housing boom is now well and truly over.’