Hometrack survey shows fastest fall in over 18 months as fears over public sector cuts start to bite
House prices fell by 0.9% in October, the fastest fall recorded in more than 18 months, according to the latest data from Hometrack.
The survey, which is compiled from a monthly survey of estate agents in England and Wales, recorded the fourth consecutive monthly fall, which has now wiped nearly 2% off the price of homes since the peak in June.
The firm said the number of new buyers registering also fell, by 2%, while the amount of homes being listed for sale rose, by 1.9%. Price falls are now being seen across the majority of the country, with just 0.1% of postcode districts reporting a rise in prices, and 56% reporting a fall.
Richard Donnell, director of research at Hometrack, said the falls were happening because of concern over the impact of the comprehensive spending review at the same time as a rush of new property on to the market:
He said: “Further price falls are inevitable in the run up to Christmas and are likely to continue into the first half of 2011. Looking to the near term, there is little prospect for any material change in market fundamentals.
“A stand-off is beginning to emerge between buyers waiting for prices to fall further and sellers being unrealistic on the price they’re willing to accept. We expect a modest adjustment in prices rather than a return to the double digit falls seen in 2008.
He added that transaction volumes, already at low levels, are set to fall further.