House price decline is likely to quicken, say reports

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The Independent Online

House prices are falling at their fastest pace since the attacks on 11 September 2001, and the rate of decline looks set to accelerate, according to two surveys out today.

House prices are falling at their fastest pace since the attacks on 11 September 2001, and the rate of decline looks set to accelerate, according to two surveys out today.

Hometrack, the property consultancy, reported a 0.6 per cent fall in the average house price to £165,800 this month - the fourth monthly decline in a row. The rate matched the largest fall that Hometrack has reported - the level for October 2001 when global terrorism fears knocked confidence.

More worryingly, the excess supply of properties on the market increased again this month. The number of buyers registered with estate agents fell by 3.8 per cent while the number of properties listed increased by 5.6 per cent.

John Wriglesworth, an economist at Hometrack, said: "House prices are likely to drop further over the next few months due to the current excess supply and the expected seasonal fall-off in the number of prospective buyers. Prices should begin rising again in the spring when, barring further interest rate rises, buyers should return to support demand."

Separately, a poll of 2,200 users of Money Saving Expert, a consumer finance help website, found that half the country believed house prices would fall over the next year. Only 29 per cent expected prices to rise.

Martyn Lewis, the television and radio presenter, who set up the website, said: "The public's sentiment is very likely to have a material impact on house prices. If they believe house prices will drop, this may well be self-fulfilling."

The average price of a house sale in October fell to 93.7 per cent of the asking price, according to Hometrack. The average time it took to sell rose to six-and-a-half weeks.

For the second month running, house price falls were spread across the country, with no county having rises. While southern England experienced biggest declines, price falls in the North were growing and becoming more widespread.

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