NOT only are house prices falling but there are more sellers than buyers, according to figures released today, suggesting that Britain has become a buyers’ market.
A survey of the national housing market by Hometrack, the property data company, shows a fractional fall in average national house prices for the second consecutive month.
Although the August decline is only 0.1 per cent on average, the drop took in more significant declines in Surrey, North and East London, East Sussex and Berkshire, where the decline was 0.4 per cent.
Overall, 26 counties recorded price falls in August, and 21 saw prices unchanged. Only ten saw an increase, the biggest being a rise of 0.2 per cent in North Yorkshire.
Hometrack says that the average national house price stands at £152,100, a lower estimate than that provided by other surveys.
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The number of new buyers registered by the survey was down by 4 per cent, after a similar drop in the preceding month.
The decrease has wiped out the excess demand for homes, which was a feature of the first half of 2004, and has established an excess of supply over demand.
Average sale prices as a percentage of the asking price also fell for the fourth consecutive month. The August level of 94.9 per cent is down from 95.5 per cent in July, and is the lowest since September 2003.
Hometrack says that this indicates that the tide has turned against sellers, who can no longer hold out for their full asking price with as much assurance as in the past.
The survey also found that the average time taken to sell a house rose to 5.3 weeks in August compared with 4.8 weeks in July and 4.2 weeks in June. The number of sales agreed fell by 2.1 per cent, having already diminished by 1.8 per cent in July.
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In towns and cities the biggest drops in property prices were in Croydon (down 1.9 per cent), Brighton (down 1.3 per cent), Oxford (down 0.7 per cent) and Bath (down 0.6 per cent).
Newport, in Monmouthshire, enjoyed house price rises averaging 0.4 per cent, but only seven other towns — Gloucester, Ipswich, Lincoln, Liverpool, Sheffield, Shrewsbury and Swansea — saw an increase, and then of only 0.1 per cent.
John Wriglesworth, of Hometrack, said: “Recent interest rises continue to take their toll on the housing market. The recent housing boom appears to be well and truly over.
“No major economic regions saw any house price rises this month and the biggest falls were in London and the South East. Areas that have seen the highest rises over the past month are now experiencing the largest falls.”
Hometrack does not expect the housing market to crash. Mr Wriglesworth said: “Providing bank base rates remain below 5 per cent, present house price levels can be supported. We see house prices bumping along the plateau over the next 12 to 18 months. Our house price inflation forecasts remain at 5 per cent for 2004 and 0 per cent for 2005.”