House prices fall as demand slides
House prices in England and Wales edged lower during August following a decrease in demand and an increase in the availability of homes for sale, research has indicated.
The average cost of a home dropped by 0.3% during the month to £158,300, compared with a 0.1% decrease in July, according to property intelligence group Hometrack.
The decline was driven by a fall in the number of people looking to move home, with demand for housing dropping for the second month in a row by 2.2%.
At the same time, the number of new properties on the market increased, with estate agents reporting a 2.4% jump in the number of homes they had on their books.
Hometrack said the latest fall in demand reflected a trend seen during the past five months, a trend that is driving the price falls.
The change in conditions has seen the average time a property takes to sell increase to 8.9 weeks, the highest level for more than a year, Hometrack said.
Sellers are also getting a lower proportion of their asking price, dropping to 93.5% from 94% in July.
Richard Donnell, director of research at Hometrack, said: "The unmistakable fact is that the availability of homes for sale has improved markedly and this has reduced the support for house prices provided by the scarcity of housing for sale over 2009 and early 2010. This comes at a time when there is growing weakness on the demand side - a weakness which represents more than just a seasonal blip."
He added: "We expect further modest price falls in the coming months."
But there were some reasons to be cheerful among the otherwise bleak figures, with the number of sales agreed modestly rising by 0.8% during the month.