House prices fall further

House prices in England and Wales fell for the tenth month in a row during July, losing a further 1.2 per cent of their value, figures show.

The average cost of a home has now slumped by 4.4 per cent during the past year, the fastest annual rate of decline since property intelligence group Hometrack first launched its index in 2001.

But despite the latest set of gloomy figures on the housing market, separate research carried out for the National Housing Federation predicted that the property market will bounce back from its current slump, with house prices in England rising by 25 per cent during the coming five years.

Hometrack reported price falls in 65 postcode districts of England and Wales during July, adding that the average home now cost £168,500, the same as in October 2006.

It said demand from potential buyers had continued to fall during the month, with the number of people registering with estate agents slumping by 6.4 per cent, following a drop of 5.7 per cent in June and one of 6.7 per cent in May.

At the same time the number of properties on the market rose by 1.1 per cent, while the average time it takes to sell a home further increased to 11 weeks.

Homeowners are now getting an average of just 90.9 per cent of their asking price, the lowest level since the survey began and well down on levels of 95.1 per cent 12 months ago.

Richard Donnell, Hometrack's director of research, said: "Indicators of market activity across the housing market remain weak with the survey highlighting a 20 per cent drop in demand over the last three months.

"With no immediate end in sight to the current uncertainty, activity levels are likely to remain suppressed with prices remaining under pressure into the autumn."

East Anglia saw the biggest drop in prices during the month, with the average cost of a home falling by 1.4 per cent, while slides of 1.3 per cent were recorded in Greater London, the South East, South West and East Midlands.

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