House prices declined at their steepest rate for nearly two years in October, and further falls have been described as 'inevitable'.
Property prices fell by 0.9% last month, the most marked drop since January 2009. The extent of the price dip was felt across more than half of England and Wales, with falls reported in 56% of agents, figures from Hometrack show.
In August and September, just 30% and 34% of agents reported a fall in prices, suggesting the housing market slump is becoming more widespread. The falls seen in October were the most widespread since February 2009, although they fell well short of the 75% high recorded two years ago.
It is the fourth month in a row that prices have fallen, with an oversupply of property – the number of homes on the market has grown by 14% over the last six months, while demand has fallen by 8% - partly to blame. It marks a change from earlier in the year when a lack of housing had helped prop up and inflate prices.
"Further price falls are inevitable in the run up to Christmas and are likely to continue into the first half of 2011," commented Richard Donnell, director of research at Hometrack.
"The mismatch between faltering demand and increasing supply looks set to continue with the re-pricing process is likely to be drawn out into the first half of 2011.
"A stand-off is beginning to emerge between buyers waiting for prices to fall further and sellers being unrealistic on what they are willing to accept."
It is also thought that already low transaction levels will decline further. The one silver lining is that a modest adjustment to prices will take place, rather than a return to double digit falls that were apparent in 2008.
Find the best mortgage rate - Compare Best Selling mortgages
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.