House prices dipped slightly again in October, according to the latest survey by property analysts Hometrack.
Its report found that house prices fell by 0.1 per cent in October despite sellers lowering prices to produce a jump in the number of sales. House sales agreed increased by 9.2 per cent and there was a small rise in new buyers registering with agents in October.
Hometrack reports that re-pricing older stock on the market has been a key trend of the summer and has led to some impressive increases in the number of sales made. Wales and the West Midlands saw the strongest rise in new agreed sales at 18 and 17.6 per cent respectively.
Richard Donnell Director of Research at Hometrack said: “Year-on-year house price inflation is currently registering the lowest level of price falls for two years (currently -0.4%).
This is down to a strong spring market in 2012 and a steady firming in underlying pricing levels in the north of the country.”
The 0.1 per cent fall is the third monthly drop in a row but it was mainly caused by sellers lowering prices than a fall in demand.
The number of registered buyers increased by 0.3 per cent after four months of falling demand but this was driven by a 3.9 per cent increase in London.
Hometrack said that year-on-year, house price inflation is showing the lowest rate of price falls for two years at 0.4 per cent.
Although the falls in prices have been minimal, Hometrack warned that there is unlikely to be a material rise in demand for properties until there is a sustained rise in household incomes.
The report said that price increases earlier in 2012 and a slowdown in the rate of price falls in the north explained the improvement in the year-on-year rate of growth. Hometrack reports that prices appear to be firming in the north with a continued decline in the difference between asking and selling prices.
The time a property spent on the market before being sold remained steady at around 12 weeks in the midlands and northern regions, eight weeks in the south and less than six weeks in London.
The next six weeks are a vital time for the property market as estate agents try and push through as many sales as possible before Christmas.
Richard Donnell said: “The news that the UK has moved out of recession in the third quarter of 2012 is welcomed. However, the foundation of any national and sustainable recovery in the housing market rests on growth in the wider economy and household incomes.”