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House prices down for third consecutive month

The survey reports a 0.3% fall in average national house prices which means that over the past seven months house price inflation has steadily reduced from a peak of 0.9% growth in February.

The survey says excess supply of properties in the market has increased sharply this month with the number of buyers registered with estate agents falling by 5%following falls of 4% in the previous two months.

Hometrack&#39s national demand index is now recording an increase in supply relative to demand for the fourth month running. The excess supply points to further house price falls in the coming months.

Hometrack has reduced its 2004 house price inflation forecast to 3% from 5% and predicts 0% house price changes for 2005.

Agreed sales also fell by over 5% this month, up from -2% in August&#39s survey, and average sales prices achieved as a percentage of asking price, fell for the fifth month in succession to 94.5%, the lowest for well over a year.

Average time taken to sell has risen to 5.8 weeks and the number of viewings has risen to 11.4 per sale.

House price falls are spread across the whole country. Only five counties out of 57 reported price rises – Teeside (0.2%), South Lincolnshire (0.1%), Nottinghamshire (0.1%), North Yorkshire (0.1%) and North Wales (0.1%).

The largest falls occurred in west London (1%), Surrey (1%), east London (0.9%) and central London and the City (0.8%).

While the South is definitely experiencing the fastest property price decline, price falls in the north are getting larger and becoming more widespread.

John Wriglesworth, Hometrack&#39s housing economist, says: “Rising interest rates and reducing consumer confidence in the future of the market have taken their toll for the third month running.

Falling buyer numbers relative to the number of properties for sale are boosting excess supply in the market, suggesting more price falls over the coming months. We have reduced our house price forecast for 2004 to 3%.”

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