Buyer Demand Has Halved Since Credit Crunch Began

House prices fell for the ninth consecutive month in June as buyer demand continued to dry up, according to the latest figures from Hometrack.

The monthly decline intensified to -1 per cent from May's fall of -0.5 per cent.

However it was the year-on-year change that suffered the most substantial deficit, with house prices -3.2 per cent lower than in June 2006.

This marks the lowest rate of annual growth since September 2005.

The greatest price falls were recorded in London (-1.3 per cent) and the South East (-1.1 per cent).

A serious lack of buyer interest has been responsible for the massive dent in demand as new buyer registrations continued their descent with a -5.7 per cent decrease over June.


Slower Market

While demand was busy falling, supply continued to increase, albeit at a slower rate in June compared to May.

Agents recorded a 1.4 per cent increase in properties on their books in June, compared to growth of 3.5 per cent the month before.

Nevertheless, with the supply versus demand imbalance now firmly favouring buyers, coupled with the affordability constraints from tighter lending, sellers in June managed to achieve on average just 91.6 per cent of their asking price.

Not only is this a far cry from the 95.6 per cent achieved just a year ago, but is also the lowest level since the Hometrack survey began in 2001.

A further result of waning transaction activity was the average time taken to sell a property, which reached 10.3 weeks in June, compared to just six weeks a year earlier.