House prices fell for the third consecutive month with a drop of 0.1 per cent in October.
According to the Monthly National Housing Survey, year-on-year house price inflation is currently registering the lowest price falls for two years, in spite of a rise in demand and sales agreed.
Price rises earlier in the year and a slowdown in the rate of price falls in northern regions explain the improvement in the year-on-year rate of growth.
There are signs that prices are steadying in the north of the country, with a continued decline in the size of the gap between asking and achieved prices over the last 6 months.
Re-pricing older stock to a level where sales can take place has been a key trend over the summer.
As a result, October saw a 9.2 per cent increase in the number of sales agreed while double digit growth in sales was seen in the midlands and Wales.
Overall demand for housing remains subdued.
The modest headline increase in demand nationally was largely driven by a 3.9 per cent jump in new buyer registrations in London. This follows four consecutive months of falling demand in the capital from June to September.
The time required to sell a property remains largely unchanged, despite a slowing in price falls over the last two years, with properties spending an average of 12 weeks on the market in October in the midlands and northern regions, eight weeks in the south and less than six in London.
While the UK has moved back into economic growth and out of recession in the third quarter of 2012, the housing market will not see a sustainable recovery until there is sustained growth in the economy and real household incomes.
Commenting on the latest monthly national housing survey, Richard Donnell Director of Research at Hometrack – the property analytics business – said: “Year-on-year house price inflation is currently registering the lowest level of price falls for two years (currently -0.4 per cent).
“A clear improvement can be seen in northern regions, with pricing moving towards a more neutral level.
In London and the south, prices continue to rise. In London for example the difference between asking and achieved prices is 5.7 per cent.”
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