House prices fell back 0.8% in November, following a 0.9% drop in October, Hometrack reports today.
This morning’s report also says that the number of new applicants has dropped by 4.3%. The drop in buyer demand was the largest monthly fall since January 2009.
The survey of over 5,100 estate agents says that house prices have fallen in 54% of a total of 2,300 postcodes, and risen in just 0.1%.
Hometrack’s economist, Richard Donnell, said of the falling demand: “This mirrors similarly weak data on levels of mortgage lending announced earlier this month.” He added that it was “inevitable” that the weak demand would continue.
He went on: “Looking ahead, the real impetus to reduce supply is set to come from agents. Over the coming months, estate agents will be turning their attention to the supply of homes on their books, anxious to adjust stock levels to realistic prices more closely aligned to demand.“
The reality is that in the months ahead, vendors will either need to reduce prices or withdraw property from the market.”
He expected house prices to decline by 2% next year.The Hometrack report has proved consistent with the Land Registry, although it is effectively published a month ahead of the latter.
The new Land Registry report, covering October, shows Hometrack was virtually spot on in reporting a 0.9% drop in October. According to the Land Registry, house prices in fact fell 0.8% in October, to bring the average down to £165,505.
It was the largest monthly fall since February 2009 and means that annual house inflation now stands at 3.4%.
The only regions where prices rose(by 0.3%) were London and the East – up by 1%. The largest fall was in Yorkshire and the Humber, where prices tumbled 1.8% compared with September.
Sales volumes are not up to date, but the latest records, for the three months between May and August show there were 59,512 per month – slightly up from last year when the monthly average for the same period was 55,614.
