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More house price falls predicted

More house price falls predicted

Category: Mortgages

Updated: 03/10/2011
First Published: 03/10/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The struggling economy and falling consumer confidence are resulting in buyers walking away from the housing market.

A report has found that the gap between supply and demand in the housing market is widening; a trend which could result in an acceleration in the level of price falls towards the end of 2011.

Figures from Hometrack show that the average price of a home in the UK fell by 0.1% for the third month in succession during September.

Figures show that prices have now fallen for 15 months in a row.

Buyer numbers fell during September, as was the case in August.

The number of new properties coming to the market has increased by almost a quarter in the nine months to September, while demand has only risen by 11%.

"As the gap between supply and demand widens, we are likely to see an acceleration in the level of price falls," said Richard Donnell, director of research at Hometrack.

"Events in the Eurozone, together with pressures on the domestic economy and household incomes are clearly taking their toll on consumer confidence.

"We expect demand to continue to slip back over the final few months of the year."

While prices are not falling at such a fast rate as was seen in the second half of last year – when values fell by an average of 0.5% each month – it has only been the relative strength of the London market that has resulted in smaller declines.

Prices in the capital have risen by an average of 0.2% each month so far this year.

Homes in London are going under offer after an average of six weeks currently, compared with the 11 week national average.

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