UK Housing Market Wanes

According to the property information company, Hometrack, the cost of a home has dropped by 0.4% in the month of September alone. This means that the cost of a home has dropped for the third month in a row.

The demand for property is declining and this is thought to be because of the soon-to-be-announced spending cuts. The decline in Britons who want to jump on the property ladder has meant that house prices have fallen in every region of England and Wales for the first time since the spring of 2009.

Richard Donnell, Hometrack’s director of research comments that the grey economic outlook is taking its toll on buyers sentiment. He says:

“Growing concerns over the economic outlook and public spending cuts are weighing heavily on would-be purchasers.”

“The market is now entering the second phase of the re-pricing process as a response to falls in both sales volumes and demand. Over the rest of the year and into early 2011, agents will start to focus on re-pricing the property on their books to a level where transactions volumes are maintained.”

In addition to the price decline, the survey reveals that the number of homes coming onto the market has risen by 7.2% whilst the number of prospective buyers registering with agents fell by 6.5%.

The survey also reveals that such a decline is echoed in lenders and mortgage approvals, in what is thought to be a ‘second phase’ of repricing.

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