A MODEST recovery in the housing market appears to have stalled, with a 0.2 per cent fall in house prices this month, a survey shows today.
Hometrack, a property research company, said that prices have now fallen every month in the past year. June’s 0.2 per cent drop was worse than the modest 0.1 per cent fall in each of March, April and May, and means that house prices have now fallen by 3.2 per cent over the year.
Hometrack paints a considerably more downbeat picture of the housing market than other surveys. Nationwide recorded a 5.5 per cent rise in house prices in the year to May, while Halifax found that prices rose by 5.7 per cent in the year to May.
Hometrack found buyers starting to thin out as they wait for prices to fall further. The company recorded a 0.1 per cent drop in the number of new buyers coming on to the market in June, down from a 2.2 per cent rise the previous month.
That fall in buyer interest caused buying activity to slow. The number of agreed sales rose by just 3.5 per cent, down from 7.6 per cent in May. The amount of time it now takes to sell a house has risen to an average of 7.6 weeks, compared with 4.2 weeks a year ago.
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Hometrack said that the lack of buyers, coupled with a continuing increase in the number of available properties, would inevitably lead to a correction in the form of further cuts in house prices.
John Wriglesworth, Hometrack’s housing economist, said: “The market over the last few months has looked like it was about to come up for some fresh air, with house prices coming tantalisingly close to turning positive. However, June’s price fall signals a stall in the road to recovery.”
The survey said that prices increased in only one county – Northumberland, where the rise was 0.1 per cent. The county worst hit by the slowdown was Norfolk, with a fall of 1 per cent. The city of Lincoln saw a 2 per cent drop in prices.
But Mr Wriglesworth denied suggestions that the stagnation in the property market might lead to a crash.