House prices have fallen for the third month running after the market failed to make its usual early autumn recovery
According to research group Hometrack, house prices fell by an average of 0.3% in the month to mid-September.
John Wriglesworth, Hometrack’s housing economist, said: “The housing boom is now well and truly over.”
The excess supply of homes for sale increased sharply, as the number of buyers registered with estate agents fell 5%.
“Rising interest rates and reduced consumer confidence in the future health of the housing market have taken their toll for the third month running,” said Wriglesworth.
“A fall in the number of buyers, relative to the number of properties for sale, is increasing supply in the market, suggesting more house price falls over the coming months.”
He added that there was no evidence to suggest that the housing market would crash in the next year.
This is consistent with the major housebuilders, who have said the market has slowed to a sensible level.
The largest drop in prices occurred in west London and Surrey, both of which fell 1%. Those areas were closely followed by east London, and central London and the City, which dropped 0.9% and 0.8% respectively.
Only five out of a total of 57 counties reported a rise in house prices – Teesside (0.2%), South Lincolnshire (0.1%), Nottinghamshire (0.1%), North Yorkshire (0.1%) and North Wales (0.1%).
A report this week by the British Bankers’ Association added to the gloomy outlook. The research, published on Monday, said that after seasonal adjustments, net mortgage lending in August rose £4.4bn – the weakest growth since June 2002 and 21% lower that the £5.6bn average for the previous six months.