Demand for housing dropped by -4.3% in November – the fifth monthly fall in a row and the largest single monthly decline since January 2009.
According to the latest Hometrack House Price Survey this decline is largely seasonal but the scale of the fall has been exacerbated by weaker consumer sentiment. All this at a time when expectations are that house prices are set to fall further.
As the outlook has become uncertain, so the supply of homes coming to the market has begun to fall. The number of properties for sale fell by -0.4% in November. This is the first time in 9 months that the survey has registered a fall in supply.
A continued reduction in the supply of homes for sale seems inevitable in the coming months as vendors either reduce asking prices or withdraw property from the market. We expect this to act as a support to pricing levels over the second part of 2011.
Despite a decline in supply the weakness in demand continues to put downward pressure on prices. November registered the fifth consecutive monthly decline in house prices – down -0.8% compared to a -0.9% fall in October.
The extent of house price falls stabilised over November with prices down across 54% of the country compared to 56% in October.
Weakening market conditions have resulted in the average time on the market rising to 9.8 weeks – the highest level for 17 months since May 2009.
The proportion of the asking price being achieved has dropped to 92.4% the lowest level since September 2009
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