In a fresh blow to the property market, figures published today show that house prices fell for the third month in a row in September.
Analysts at Hometrack said despite the Government’s Funding for Lending scheme supporting a modest increase in mortgage borrowing, the continuing uncertainty surrounding the economy and ongoing affordability issues will act as a drag on housing market activity for some time to come.
Richard Donnell director of research at Hometrack predicted house prices will continue to drift slowly lower over the remainder of the year.
Official Land Registry figures for August – published on Friday – painted a depressing picture of a static UK property market.
Hometrack’s survey paints a similar subdued view. It reveals that demand has fallen for the last four consecutive months with September registering the largest fall, dipping down 3.6 per cent.
September also saw the first monthly decline in supply, slipping down 0.9 per cent after seven months of growth.
No region registered price increases in September. House prices were static in London and the south west and fell in all other regions.
“The legacy of summer, which saw a slowdown in demand driven by seasonal factors compounded by the Olympics, has continued into September,” said Mr Donnell. “This has added further to low consumer confidence which has been a feature of the housing market for some considerable time.”
He said the percentage of the asking price achieved remained unchanged at 93 per cent. The biggest gap between asking and achieved prices continues to be in northern regions – at 8.1 per cent - but the gap is starting to widen in London and the south.
Meanwhile, the time a property remains on the market has nationally increased to 9.9 weeks.
In the south east the figure has climbed 10 per cent to 8.8 weeks since May.
The time on the market now stands at over three months in three regions. It takes longest to shift a property In the east Midlands at 13.3 weeks but the north east - 12.6 weeks and north west - 12.4 weeks – are also areas where sellers have to be very patient.
“This is the most definitive indicator of the health of the market – at both a national and local level,” said Mr Donnell.
Other commentators echoed his lack of short-term hope for the property market.
'Continuing lack of confidence in the economy and the ongoing situation in Europe, which produces bad news on almost a daily basis, means we are a long way off a recovery,” said independent buying agent Gabby Adler.
David Newnes, director of LSL Property Services, said: “Any substantial recovery will be closely tied to the ability of banks to get adequate and affordable funding to the frustrated buyers that really need it.”