House prices have fallen for the sixth consecutive month, says property research firm Hometrack.
The report says average prices slipped 0.2% in March with the annual rate of growth falling to +0.4%, the lowest level for 2 years and suggests that pricing will continue on a downward trend in the coming months.
The survey did however reveal an increase in demand and transaction levels.
Hometrack says last month’s increase in new buyer registrations has continued, though to a lesser extent over March, with a 1.2% increase in the number of buyers registering with agents.
The survey also identified an 8% increase in sales agreed over the month after a 20% increase over February. The average time to sell a property remained unchanged at 8.5 weeks.
Richard Donnell, director of research at Hometrack, says: “Some bounce-back in market activity was inevitable after what has been a prolonged period of weak market activity.”
Donnell says the growth in demand is likely to be a non-event this year as it remains at only a third of the level seen in past years.
He says: “Indeed, the likelihood of any sustained increase in demand over the spring period is very limited. Continued uncertainty in the financial markets, affordability pressures and weak buyer confidence are all likely to suppress levels of market activity in the months ahead with pricing levels remaining under pressure.”
Despite this the survey says demand for housing still exists but the majority of households simply do not need to move.
It says this has resulted in major declines in measures of market activity over the last six months and continues to forecast a 17% drop in transaction volumes over 2008.