House prices drop for eighth month

Updated 08.54 Mon May 26 2008
Keywords: market, mortgage, crunch, credit, drop, fall, prices, house

House prices have fallen for the eighth month in a row as a "buyer's strike" continues to grip the market, figures have suggested.

Hometrack said the average value of a home in England and Wales fell by 0.5 per cent in May to stand at £172,200.

The drop follows a 0.6 per cent fall in April and leaves houses costing 1.9 per cent less than they did a year ago, according to the firm.

Hometrack's research director Richard Donnell blamed the further slide on a drop in the number of buyers registering with agents.

He said: "What we referred to last month as the 'buyer's strike' continues."

The survey also showed an increase in the time taken to sell a property which now stands at 9.8 weeks, up three weeks from 5.8 weeks a year ago.

Price drops were found in 53 per cent of postcodes registering lower prices over May compared to April, up from 51 per cent the previous month.

The housing market has been coming under increasing pressure in recent months due to less affordability and the credit crunch.

Mr Donnell said: "The fall in buyer confidence over the last six months has certainly impacted on transaction volumes but we do not believe that this is a precursor to a major rise in forced sales and large price falls.

"It seems likely that in that short term prices will continue to edge down until they reach a level where buyers are prepared to commit."

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