House Prices Continue To Fall
Hometracks latest house price survey’s shows that house prices have fallen for the eight month in a row. Buyers are reluctant to join the market, and the CML has reduced its growth forecast to negative.
Figures from the property information group Hometrack show that average prices were down by 0.5% during the month of May, following a 0.6% fall in the previous month. It is the eighth month in a row that house prices have fallen, as buyers continue their reluctance to re-enter the market.
Hometracks year on year house price change shows a rate of growth of -1.9%, down from 0.9% in April. It is the lowest level since November 2005 when growth was down at -2.3%.
Some within the industry are now referring to a ‘buyers strike’, and there was a 6.7% fall in the number of buyers registering with estate agents in May. It is easy to see why buyers would be reluctant to join the market at this stage, as they could quite easily see the value of their house drop lower than the amount they paid for it within a few weeks. Most, therefore, are adopting a ‘wait-and-see’ stance. With that attitude prevailing it is also quite easy to understand why values remain under downward pressure as sellers have to reduce their prices to attract any kind of buyer interest at all.
In February the market saw a 20% increase in the number of properties for sale, but this has only served to worsen the situation and it now takes an average of 9.8 weeks to sell a property, which is three weeks longer than in May last year.
Hometracks research takes views from 3,500 surveyors and estate agents from England and Wales.
The fall seen in this survey comes on the back of the Council of Mortgage Lenders’ reduction in forecast from a gain of 1% in 2008 to a drop of 7%. Optimism in the housing market is in short supply.
