House prices fall to 2-1/2 year low

Published 28th Oct 2008

English and Welsh house prices fell by 7.3 percent in the year to October, with the pace of decline accelerating to take prices back to their lowest since March 2006, property consultancy Hometrack said on Monday.

Average house prices fell by 1.3 percent to 163,200 pounds in Hometrack's October survey, faster than the 1.0 percent drop recorded in September.

The downturn in property prices -- which had doubled since the start of the decade -- is both a consequence and a cause of the economic gloom settling on Britain, where two thirds of households own their own home.

Official data released on Friday showed that the economy shrank for the first time in 16 years between July and September, contracting 0.5 percent, and Prime Minister Gordon Brown has warned that the country risks recession.

"The outlook for demand is set to remain weak as consumers focus their attention on the economy," said Richard Donnell, Hometrack's director of research.

"The expectation of a forthcoming recession and rising unemployment will further undermine demand for housing and continued price falls are inevitable in the months ahead."

Homes took an average of 11.9 weeks to sell, up from 11.5 weeks in September, and buyers paid just 89 percent of sellers' asking prices, down from 90 percent last month.

While the number of sales agreed rose by 5.4 percent, reversing September's 5.8 percent drop, there were 3.3 percent fewer new buyers registering with agents than the previous month and 0.9 percent fewer properties listed.

Source: ' reuters '

View All Latest News