House prices fall for the fifth month in a row. A monthly fall of –0.6 percent, the same as last month, as demand continues to fall relative to supply.
The average property price now stands at £164,800, down from a peak of £167,700 in June this year. Since January this year prices have risen by 1.90%, which hides an initial rise of 3.8% in the first six months of the year, before the downturn began in July.
The excess supply of properties on the market has increased again this month, with the change in the number of buyers registered with estate agents falling by –6.1% (-3.8% in October’s survey) and the number of unsold properties listed increasing by 3.3% (5.6% in October’s survey) - see Table 1 in Notes to Editors. Hometrack’s unique National Demand Index has recorded an increase in supply relative to demand for six months in a row (see Graph 2 in notes to editors).
Agreed sales fell by -4.8% this month (-1.0% in October’s survey), while the average number of viewings per sale increased to an all time high of 12.5 (11.9 in October’s survey) and the time taken to sell exceeded 7 weeks (7.1 weeks) for the first time ever (6.5 in October’s survey). All the data points towards this being the worst month in Hometrack’s four year history.
Average sales price as a percentage of asking price is now at an all time low of 93.1% (93.7% in October’s survey), confirming that buyers are in their best ever position for negotiating reductions on the initial asking price. Sellers have to lower their prices in order to achieve a sale.
No counties reported house price rises this month, with all, bar Cheshire, reporting falls (see Table 4 in notes to editors). The largest falls occurred in Central London & City (-1.3%), West Sussex (-1.1%), Surrey (-1.1%), London – South West (-1.1%) and Cambridgeshire (-1.1%). The counties reporting the lowest price changes were Cheshire (0%) Mid Wales (-0.1%), North Lincolnshire
House prices falling like autumn leaves – cont…
(-0.1%), South Yorkshire (-0.1%) and West Yorkshire (-0.1%). The South is still experiencing the largest price falls.
John Wriglesworth, Hometrack’s Housing Economist, comments:
“This month’s house price fall confirms, beyond doubt, that the housing boom is well and truly over. With house prices now over 100% higher than five years ago, values have reached their peak given current levels of household income and interest rates. With the excess supply of unsold properties increasing, further house price falls are inevitable over the coming months.”
“Notwithstanding the current weakness in the market, we expect house prices to stabilise next year and recover in the second half. Household incomes are rising 5% per annum, unemployment is falling and is now at a 20 year low, interest rates are now likely to remain stable rather than increase, and lenders are continuing to extend the multiple of income on which they will lend. All this points to a recovery of buyer confidence next year. Typical mortgage repayments as a percentage of average earnings are broadly in line with long term averages, and are two thirds of the previous peak back in 1989. Buyers can afford to purchase homes, but at present their inclination to do so is low.”
