Demand falls across the sector as buyers stay away
House prices in the UK fell for a third month in a row as a result of weakened demand across the sector.
The monthly Hometrack survey has reported a dismal September for the housing market, with registered buyers falling 3.6% and an increase in the time houses spend on the market before attracting a buyer.
It said 23.6% of postcode districts reported a decrease in prices in the past month compared to 6% which reported a rise. The number of agreed sales fell by 0.4%, while the estate agents survey also found that the average home took 9.9 weeks to attract a buyer in September - up from 9.5 weeks in August.
Three regions reported time on market of over three months, with homes in the East Midlands taking an average 13.3 weeks to sell, the North East 12.6 weeks and North West 12.4 weeks.
Time on market in the South East also increased to 8.8 weeks, a 10% rise since May.
The fall in demand was mirrored by a squeeze in supply, with September seeing the first monthly drop in supply for the first time in nine months.
Hometrack attributed the fall in demand to the sluggish economy and persistent affordability issues for potential buyers.
Hometrack did however expect the government’s Funding for Lending initiative to support a modest increase in mortgage lending over the coming months.
Richard Donnell, director of research at Hometrack said: “While the government’s Funding for Lending scheme is likely to support a modest increase in mortgage lending, the uncertain economic outlook, together with affordability pressures will continue to act as a drag on housing market activity.
“Pricing will remain under slow downward pressure but, the tightening of supply will limit the scale of price falls in the short term.
“The last four surveys have reported a decline in housing demand with September registering the largest fall at -3.6%. The legacy of summer, which saw a slowdown in demand driven by seasonal factors compounded by the Olympics, has continued into September.
“This has added further to low consumer confidence which has been a feature of the housing market for some considerable time. While the level of price changes varied across the country, demand over the month fell across all regions.”