The latest survey of UK house prices indicates that the cost of property fell by 0.7 per cent over the past month. The Rightmove data showed that the dip in prices during the four weeks to 10 November knocked about £1,656 off the average price of a home in England and Wales, down to £239,986.
Rightmove said the early onset of the winter sales slump had forced homeowners to drop their asking prices. Their figures are in line with the other major indices from Halifax and the Nationwide which have shown a gradual slowdown in the housing market. Rightmove said it expected there to be further falls during December and the early part of next year, before a more stable financial environment and underlying demand led to some minor price gains later in the year.
Overall, the group said it expected prices to remain flat during the year as a whole. Last week, the Nat-ionwide also predicted that UK property prices would be stable in 2008.
During the four weeks to 10 November, house prices fell in all regions of England and Wales except London, where the average price of a home rose by 2.3 per cent. The West Midlands saw the biggest falls, of 2.4 per cent, followed by the South-east at 2 per cent and Yorkshire and Humberside at 1.9 per cent. The fall in prices during the month helped reduce annual house price inflation to 7.9 per cent, its lowest level since June 2006. The annual figure during the previous four-week period was 10.4 per cent.
The average time for which a property was on the market also jumped, from 85 days to 92 days, the highest figure for November since Rightmove started keeping records five years ago.
The group said it expected interest rates to be cut in February or soon after. The money markets are pricing in up to two more cuts during the rest of the year. But it said this was unlikely to lead to a surge in prices due to affordability constraints.
The property website Hometrack and the Council of Mortgage Lenders have both predicted prices will edge ahead by 1 per cent next year, while Capital Economics has predicted they will fall by 3 per cent during both 2008 and 2009. Much depends on how far the credit squeeze reduces the ability of homebuyers to extend themselves. Rightmove forecast that house prices in the capital will rise by 5 per cent in 2008, driven by the most affluent areas where wealthy buyers are expected to keep offering more for a limited stock of properties.Reuse content