House price falls set to accelerate, warns Hometrack

UK house prices fell 0.2% in October as demand trailed off, and they look set to continue falling, new figures from property website Hometrack revealed today. The average house price is now 2.8% lower than this time last year.

According to Hometrack, the number of areas reporting price falls increased in October, with more than a third of postcodes registering decreases compared with 25% in September.

Worst hit were the West Midlands, East Midlands and the North East. Prices in London, meanwhile, remained flat after seven months of consistent rises.

‘This turnaround in fortunes is important as above-average price rises in London have flattered the headline rate of growth over recent months,’ Hometrack said.

Demand, which has been flat for the past six months, fell for the third consecutive month in October. On the supply side, the number of properties listed with agents increased 1.3%, up 11% over the past six months.

Falling demand has pushed the average time a property spends on the market up to 9.8 weeks over the past three months. Despite this, the number of sales agreed in October actually rose 6.3%, as vendors looked to move before the end of the year, Hometrack said.

'The evidence is clear that buyers are drifting away from the market in the face of weak consumer confidence and concerns over the prospects for the economy and their household finances,' said Richard Donnell, director of research at Hometrack.

'The balance between supply and demand is clearly shifting, and points to an acceleration in price falls in the coming months,' he said.

The news comes just days after Land Registry figures revealed house prices have fallen 2.6% since last year, taking the average price of a property in England and Wales to £162,109.