House prices fell by 0.1% in October, the first price fall for two years, according to the latest national housing market survey from Hometrack, the Housing Intelligence Business.
The small decline this month follows two months of zero growth, with the annual growth rate falling back to 4.4%. Average prices were down between – 0.1 and – 0.2% across all regions except the West Midlands where values remained unchanged.
‘The fall in prices over October is not unexpected. After several months of weaker buyer confidence, falling levels of demand and declining sales volumes, prices were bound to be affected, says Richard Donnell, Hometrack’s research director.
He adds: ‘We expect further small price falls in the months ahead, but these are likely to remain limited as there remains no evidence of any increase in the supply of homes for sale. If anything, the current uncertainty appears to be resulting in a decline in the numbers of homes coming to the market, which is likely to support underlying prices in the coming months.’
Overall, Hometrack anticipates further slow growth over the coming months, with small price drops likely in markets where achievable pricing levels are falling into line with demand. This is likely to be focused on markets that have seen the greatest price rises over recent years, with values in localised areas falling back off a high base. The scale of these falls should be limited by a lack of supply coming to the market for sale, believes Mr Donnell.