House prices fell for the fifth month in a row during November as demand from potential buyers dropped at its fastest pace for nearly two years, research shows today.
The average cost of a home in England and Wales fell by 0.8% during the month to stand at £155,000, following a 0.9% slide in October, according to property intelligence group Hometrack (see the Free House Price Valuation guide).
The latest fall was accompanied by a further drop in the number of people looking to buy a home, with estate agents reporting a 4.3% fall in new buyers registering with them, the steepest decline since January 2009.
The fall in demand, which has been ongoing during the past five months, is putting downward pressure on prices, with 54% of postcodes seeing house price falls during the month and just 0.1% seeing rises.
But the number of sellers putting their home on the market also fell by 0.4% during November, the first drop for nine months, while the level of sales agreed remained broadly unchanged.
Hometrack says property values were likely to remain under pressure in the near-term, but the tightening in supply should help limit house price falls to just 2% by the end of 2011.
Richard Donnell, director of research at Hometrack, says: "The seasonal slowdown in the housing market has kicked in a month early with demand for housing falling at the fastest rate for 23 months.
"This mirrors similarly weak data on levels of mortgage lending announced earlier this month.
"Concerns over the economic outlook on the back of recent spending cuts together with widespread expectations that house prices are set for a period of retrenchment, are driving the continued weakness in demand.
"It is inevitable that this trend will continue as we move into the New Year from both a seasonal and sentiment perspective."
He predicts that the balance of supply and demand looks set to change during the next three to six months, which could prevent price falls during 2011.
There was also a drop in the percentage of the asking price that sellers are achieving, with this falling to 92.4%, the lowest level for more than a year.
All areas of the country saw house price falls during November, with Greater London, the North East, the South East, Wales and the West Midlands all recording a 0.9% drop.
Falls were smallest in Yorkshire and Humberside and East Anglia at 0.4% and 0.5%, respectively.
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