Further evidence that the downturn in house prices is accelerating will be published today when Hometrack, the market analyst, will say prices fell by 0.9 per cent in October.
Today's figures follow a raft of bleak data published last week which showed that the market is still in poor health. The Bank of England ended a bad week saying net lending slumped to just £112m while mortgage approvals fell for the fifth month in a row.
Hometrack's October figure is the fourth consecutive monthly price fall recorded by its survey – and it warned that the situation is getting worse.
The market experts said prices were down across 56 per cent of the country compared to 34 per cent in September and 30 per cent in August. They fell by 0.4 per cent in September and 0.3 per cent fall in August. Hometrack blamed a rising supply of properties coming on to the market, up 1.9 per cent, combined with weaker demand among buyers on concerns over the economy and the Government's steep cuts to public spending.
Demand for housing actually fell by 2 per cent in October, also the fourth consecutive monthly fall. And the average time houses now spend on the market has increased to 9.6 weeks, the highest level since May 2009.
Richard Donnell, director of research at the analyst, warned that further falls in the run up to Christmas were "inevitable" and said that they would likely continue into the first half of 2011.
That chimes with the fears expressed by economists last week. Howard Archer, at IHS Global Insight, said that while he did not expect a crash, a total fall of 10 per cent could be in prospect before the slide comes to an end.
Mr Donnell also sought to calm talk of a crash, but added: "Looking to the near term, there is little prospect for any material change in market fundamentals. The mismatch between faltering demand and increasing supply looks set to continue, while 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 the price they're willing to accept. We expect a modest adjustment in prices rather than a return to the double digit falls seen in 2008."Reuse content