Since June 2004 house prices have fallen over £6,000, from £167,700 to £160,900 in August 2005, a drop of 3.5 per cent. In line with these figures Hometrack reported that property supply continues to exceed demand, suggesting a further period of house price reduction is likely to follow.
John Wriglesworth, housing economist at Hometrack, said: “House prices are continuing their bumpy path towards more affordable levels, and this has helped buyers come back into the market over the Summer.”
“However, we are still not in recovery mode in terms of house prices as supply continues to outstrip demand. With buyers still obtaining an average of 7 per cent discount off the asking price, vendors have been slow to set prices at realistic and affordable levels. But lower interest rates, growing incomes and full employment, as well as lenders relaxing their lending multiples, are all helping boost demand, albeit slowly,” he added.
With a fall in house prices, property transactions for September increased by 1.4 per cent and Hometrack revealed a 20 per cent increase in registered buyers since the start of the year, a factor that Northern Rock agreed with in its trading statement. Despite low home moving transactions the lender said it had seen signs of a return to the market by first-time buyers.
Geographically, September’s Hometrack study revealed house price growth within four counties – Central London and the City, Gloucestershire, West London and West Yorkshire – all rising by 0.1 per cent. East Sussex reported the largest price reductions, falling by 0.7 per cent during September.
Northamptonshire and Merseyside both reported falls of 0.6 per cent with North London house prices dropping by 0.5 per cent.
