The latest data from hometrack indicates that average house prices fell by 0.2% in October.
As each of the previous five months saw a 0.1% average house price drop this latest increase in price falls does show that the decrease in house prices seems to have accelerated, even if by a very small amount.
The driver behind this says hometrack is the falling demand, which dropped in October by 0.2%, the third month in a row that demand has fallen.
The balance between supply and demand is also shifting as October saw an increase in supply of 1.3% adding to the 11% seen over the last six months. With this has come a third monthly increase to average time a house stays on the market to 9.8 weeks.
According to hometrack this change in the supply / demand equation points to more house price falls over the coming months.
Despite this the number of sales agreed rose by 6.3% as sellers push to get their property shifted prior to year’s end.
More importantly though, the buoyant market that London has enjoyed recently seems to be coming to an end with prices in the capital flat-lining.
This slowdown in the London area may well further accelerate average price declines across the country.
“Growing consumer concern over the outlook for the economy is beginning to impact directly on house prices according to evidence from the latest monthly housing market survey from Hometrack, the property analytics business.” Said Richard Donnell Director of Research at Hometrack. “Average prices fell by 0.2% in October compared to falls of 0.1% over each of the previous 5 months. The year-on-year rate of growth currently stands at -2.8%. Above average price falls in the West Midlands (-0.6%), East Midlands (-0.4%) and the North East (-0.4%), together with static prices in London – where average prices have risen consistently for the past 7 months (since March 2011) – lie behind the increase in the headline price fall. Above average price rises in London have flattered the headline rate of growth over recent months and a slowdown in the capital will have a knock-on impact on the scale of price changes nationally in the months ahead.”