Asking prices for houses fall for third month in a row

The average cost of a home put up for sale in England and Wales during the five weeks to September 11 dipped by 1.1 per cent to 229,767, the property website Rightmove says today.

New sellers have now dropped their asking prices by 3.4 per cent, or more than 8,000, during the past three months, wiping out half of the gains which were recorded during the first half of the year.

The dip in asking prices led to a further fall in the annual rate of house price inflation, which eased to 2.6 per cent, down from 4.3 per cent in August.

Today’s figures are the latest in a run of gloomy data on house prices, which have prompted some economists to warn the market is heading for a double dip.

But Rightmove pointed out, that although asking prices were falling and there was a shortage of buyers able to go ahead with a purchase, the number of properties coming on to the market also eased during the month.

Only around 26,100 properties were put up for sale each week during the month, 11 per cent fewer than during August and the lowest level since April.

A shortage of available properties was one of the key factors that supported the housing market during 2009, with the mis-match between supply and demand pushing up prices.

But despite the fall in sellers, the average number of unsold properties estate agents had on their books remained at a record high of 79.

Miles Shipside, director of Rightmove, said: “The ‘double-dippers’ will be able to point to a clear downward trend, with new sellers dropping their asking prices for three months on the bounce.

“They can cite tough competition amongst sellers and agents struggling to find proceedable buyers for their record levels of unsold stock.

“Conversely, we are also recording the lowest weekly run-rate of fresh sellers since April. This will give some ammunition to those forecasting a flatter price trajectory as it could be an early sign of fresh supply beginning to wane.”

He said that with November and December typically being quieter months in the housing market, property prices looked set to end 2010 at around the same level at which they they started it.

He added that the direction of the market during 2011 was likely to be driven by the continuing balance between supply and demand.

The group said the fall in new sellers coming to the market may be due to an end of the backlog of speculative sellers, who had been put off marketing their property while home information packs were in force, but had come to the market since they had been abolished.

It may also reflect the fact that low interest rates were limiting the number of forced sales, while potential home movers were putting their plans on hold due to the uncertain economic outlook.

Only two regions of England and Wales saw price increases during the month, with asking prices rising by 1.3 per cent in East Anglia and by 0.9 per cent in the North West.

The East Midlands saw the steepest price falls at 4.4 per cent, followed by the North at 2.4 per cent.