The Hometrack October survey of the national housing market reports a further fall of -0.1per cent, marking the 16th consecutive month of house price falls.
The national average house price now stands at £160,700, down from a peak of £167,700 in June 2004 and down over 3.5 per cent in the past 12 months.
The number of buyers registering with estate agents has increased by 2.1% this month, bringing the total increase in buyers this year to over 22%. More buyers in the market and a greater level of confidence has resulted in an increase in activity of 5.9% this month (+15.5% over the past 3 months).
Notwithstanding the increase in buying activity, supply still exceeds demand, with a further increase in the number of properties listed of 1.9% (over 30% since the beginning of the year). Accordingly, house prices will continue to fall until supply and demand realign.
Sales price as a percentage of asking price has decreased slightly to 93.1% this month (93.2% in September’s survey), indicating that it is still very much a buyers’ market. Buyers are continuing to negotiate large discounts off asking price, and have greater bargaining power.
The time taken to sell a house has decreased a touch to 8 weeks this month (8.1 weeks in September’s survey), but is still much higher compared with October 2004 when it took an average of 6.5 weeks to sell a property. The number of viewings per sale has also decreased this month to an average of 12 (12.4 in September’s survey). With more buyers in the market, houses are not sticking as long.
Of all the counties, only one has seen price rises this month, 24 have remained static and 32 have seen price falls. Lancashire has seen price rises of 0.1%, while Cambridgeshire, Leicestershire and Suffolk were among the counties remaining static. The counties reporting the worst price falls this month are Wiltshire (-0.5%), West Midlands (-0.3%), South Yorkshire (-0.3), and Nottinghamshire (-0.3%). (See Table 4 in Notes to Editors).
Of the cities, 2 have seen price rises, 37 have remained static and 15 have seen price falls. The cities reporting the price rises are Leeds (0.2%) and Liverpool (0.1%), while Bath, Bristol and Lincoln are among the cities remaining static. The cities reporting the largest falls are Salisbury (-1.9%), Taunton (-0.4%), Nottingham (-0.4%) and Manchester (-0.4%).
John Wriglesworth, Hometrack’s Housing Economist, said:
“The key feature of the market this month is a significant increase in house sales activity, helped by more buyers returning to the market. However, the number of houses for sale has also increased and as a result, excess supply continues to plague the market. House price falls continue unabated.
“Vendors have been painfully slow adjusting their asking prices to market clearing levels and this is prolonging the pain of excess supply in the market. Future house price falls are inevitable over the next few months despite transactions improving.
“Annual house price deflation this year looks set to be around -4%. However, 2006 should see a recovery as rising household incomes should help improve house purchase affordability. Baring interest rate rises or significant jumps in unemployment, a robust, if not exceptional, house prices should resume their upward path before the middle of next year.”
