Consumer fears hit property prices

for sale signsHouse price falls accelerated this month as demand fell back with consumers concerned about the economy, a report from property analyst Hometrack has found.

The price of a typical home dropped by 0.2% in October, compared with falls of 0.1% over each of the previous five months, while average growth is down by 2.8% on the previous year.
Areas hit by above average falls over the month included the West Midlands, which experienced a 0.6% drop, the East Midlands, with a 0.4% fall, and the North East, which also experienced a 0.4% tumble.

Demand for housing also fell by 0.2% in October, the third consecutive month in a row, fuelled by concerns over the economy and household finances, the report found. On the supply side, October saw a 1.3% increase in the number of homes listed with agents, meaning supply has grown by 11% over the last six months.

The report predicted that the balance between supply and demand points to an acceleration on price falls in the coming months.

Richard Donnell, director of research at Hometrack, said: "Growing consumer concern over the outlook for the economy is beginning to impact directly on house prices."

Prices in London were described as "static" with Greater London recording an average overall price change of 0%.

London had previously seen seven months of consistent rises - and Hometrack said London's change in fortune was significant as previous rises had "flattered" the overall rate of growth.

October did see a 6.3% rise in the number of sales agreed overall, Hometrack said, as sellers look to move before the end of the year.

Weaker demand means that the average time for a home to stay on the market is 9.8 weeks, having crept up over a period of three months, rising to 13 weeks in the East Midlands and 12.5 weeks in the North West.

© 2011 Press Association
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