House prices fall but shortage underpins market

Hometrack, the housing intelligence specialist, has published its latest national housing market survey, showing that in January, house prices fell for the fourth consecutive month.

National average values decreased by 0.3%, the same rate as in December, taking the year-on-year rate of growth down to 2.3%, the lowest level recorded since June 2006.

London and the South West recorded the largest falls, both at -0.4%.

However, only 23% of estate agents questioned reported that house prices had fallen, compared with 31% in December.

During January, the average time taken to sell a home extended to 8.5 weeks, the longest period since the survey began in 2001.

On an annual basis, the average proportion of a property asking price achieved has decreased to 93.5%, down from around 96% in January 2007.

Hometrack is forecasting that in the sort-term, the greatest pressure on pricing levels is likely to be in the South West and Eastern regions of the country, where the proportion of the asking price being achieved is currently less than 93%.

Richard Donnell, Hometrack’s Director of Research, comments: “Weak confidence among would-be purchasers continues to put downward pressure on house prices although the scale of the recent falls is relatively small when put in the context of gains over the last few years.”

He adds: “Underlying prices are still being supported by a continued tightening in the supply of homes for sale, a trend that is likely to continue … with most buyers also being sellers, households are now waiting until there are signs of general stability before committing to the market.”

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