Rise in supply pushes house prices down

 
Ben Southwood
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HOUSE PRICES continued to slide in October, data from Hometrack revealed today, as an increase in supply outstripped a smaller boost to demand.

The average house price slid 0.1 per cent in October, the data showed, after equal falls in August and September. This fall was driven by a 1.4 per cent increase in property listings outweighing the 0.3 per cent growth in new buyers.

Of all postcode districts, just 5.7 per cent saw price increases, compared to some 31 per cent reporting that prices declined.

But Hometrack research boss Richard Donnell preferred to look on the bright side, saying: “Taking a broader view of the market, year-on-year house price inflation is currently registering the lowest level of price falls for two years – currently minus 0.4 per cent.”

“This is down to a strong spring market in 2012, and a steady firming in underlying price levels in the north of the country,” Donnell said.

He also noted the 9.2 per cent rise in sales agreed, which he says has been driven by the reduced prices.

This more optimistic picture is also reflected in Rightmove’s consumer confidence survey, also out today.

The proportion of respondents predicting prices will be up in 12 months time increased from 22 per cent in October 2011 to 29 per cent this month, Rightmove says, driven by improvements in the mortgage market.

But the survey also revealed that many are being hit with the “negative equity curse.” Seventeen per cent of those whose houses decreased in value between 2007 and today found themselves with a mortgage worth more than their house, the survey said.