House prices have fallen for the fourth successive month and the average time it takes to sell a property is now 8.5 weeks – the longest since Hometrack began its monthly surveys in 2001.
Hometrack says the average cost of a home fell by 0.3 per cent in January, following a similar decline in December. The annual rate of growth slipped back to 2.3 per cent – the lowest since June 2006. It says there is still demand despite lower levels of activity and weak confidence among buyers but the proportion of the asking price being achieved has fallen to 93.5 per cent from 96 per cent a year ago.
It says the greatest pressure on pricing levels over the short term is likely to be in the South-west and East where the proportion of the asking price being achieved is less than 93 per cent. The firm says that with no immediate improve-ment likely on the demand side, there is likely to be continued downward pressure on prices.
Director of research Richard Donnell says: “Weak confidence continues to put down-ward pressure on prices although the scale of recent falls is relatively small when put in the context of gains over the last few years. Underlying prices are still being supported by continued tightening in the supply of homes for sale, a trend that is likely to continue. The short-term outlook for activity hinges as much on the outlook for interest rates as it does the outlook for financial markets.”