House prices have fallen sharply again in November, property analyst Hometrack said today, with a marked drop in the number of new buyers undermining the market.
The value of the average home has fallen by 0.8 per cent over the past month, according to Hometrack's database of 5,100 estate agents. It warned that faltering consumer confidence was proving to be a drag on demand, with the usual Christmas slowdown beginning a month earlier than usual.
Demand for housing has fallen by 4.3 per cent over the past month, Hometrack said, the fifth monthly decrease in a row, but the steepest fall since January 2009. The property analyst said the majority of market indicators remained bearish: the average time on the market for properties before a sale is agreed is now 9.8 weeks, up from 9.6 weeks last month; the average buyer is now achieving just 92.4 per cent of their asking price, down from 92.7 per cent in October. Some 54 per cent of postcode districts have recorded falling house prices over the past month. Just 0.1 per cent reported a rise.
Hometrack warned house prices were likely to continue falling, though it said restrictions on supply, as sellers took fright at the market, would mean the decline was unlikely to be dramatic. It is predicting a 2 per cent fall for the housing market for 2011 as a whole.
Supply already appears to be tightening, with the number of homes for sale falling by 0.4 per cent over the past month, the first drop for nine months.
"The reality is that in the months ahead vendors will either need to reduce prices or withdraw property from the market," said Richard Donnell, Hometrack's director of research. "This is a process that will run over the next three to six months and will result in a gradual tightening of supply, a trend that will act as something of a support to prices over the course of 2011."
Hometrack's figures are broadly in line with the findings of other property analysts, all of whose surveys are now pointing to falling prices. Official figures from the Land Registry last week revealed that UK house prices fell by an average of 0.8 per cent in October. Nationwide, the lender. expects declines to continue into next year.