House price slide goes on with 10 per cent fall in year

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The Independent Online

A survey today reveals more misery for British homeowners as house prices dropped a further 1 per cent in January, the 16th consecutive month of falls. Hometrack's latest national housing market survey released this morning found average residential prices fell just under 10 per cent in the year to January.

This marks further depressing news for the UK housing market only days after the accountancy group Ernst & Young predicted a further 22 per cent drop over the next year and a half as the recession deepens.

Online agency Rightmove also had dire numbers out last week and analysts are predicting further pain on Thursday when Nationwide announces its latest house price index data.

Hometrack's survey found that the latest 1 per cent fall followed drops of 0.9 per cent in December and 1.1 per cent in November. The worst hit region was Greater London, which saw falls of 1.1 per cent. The group sampled 5,800 responses from agents and surveyors across the UK to take a view of the "frontline of the housing market".

Richard Donnell, director of res-earch at Hometrack, said: "While re-pricing in the market has been under way for the past year, the reality is that over 2009 the market is at the mercy of the economy."

The news gets worse for those looking to sell. The period of time properties are languishing on the market is also getting longer, now at 12.3 weeks, 45 per cent more than this time last year. "Purchasers remain few in number and cautious – some agents have reported potential buyers extending rental contracts for another six months to sit out the current uncertainty," Mr Donnell said.

Sellers are beginning to lower their expectations, with the number achieving their asking price also falling, at 88.3 per cent, from 93.5 per cent a year ago. "These measures suggest continued price falls over 2009," Hometrack said, forecasting house turnover 10 per cent lower than last year.

Mr Donnell added: "The short-term prospects for the economy and unem-ployment are at the front of most consumers' minds, and these will be key to the performance of the market in 2009."