Economic Woes are Still Pushing House Prices Down

Economic Woes are Still Pushing House Prices Down

9:39 AM, 1st November 2011, About 12 years ago

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The housing market is still falling – but the pace of the slide is slowing down, according to the latest property price report.

Prices slipped by 0.2% in October – compared to a 0.1% fall over the previous five months in a row, says Hometrack, an independent house price data analyst.

Homes were losing value at a greater pace in the West Midlands (down 0.6%); East Midlands (down 0.4%) and the North East (down 0.4%).

House prices were 2.8% down on October last year.

The number of postcode areas registering price falls increased by a third in October, compared to a quarter in September.

Demand dropped back again in October by 0.2% as concerns about jobs and household finances gripped buyers.

Supply was up – by 1.3% – reinforcing a trend over the past six months that has seen the number of homes for sale rise by 11%.

Sales were up by 6.3%, but homes are taking longer to sell as the average time on the market is just under 10 weeks.

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

“The increase in price falls comes on the back of a continued lack of potential buyers. The evidence is clear that buyers are drifting away from the market in the face of weak consumer confidence and concerns over the prospects for the economy and their household finances.”

Meanwhile, the Bank of England disclosed gross secured lending against property fell to £12.2 billion in September as mortgage approvals decreased.

Loans to buy a home fell from August to September to 50,967, but were still ahead of the average 48,460 for the previous six months.

Remortgages hit 34,924 – up on the six month average of 31,140.

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