Its latest figures showed a “clear shift” in supply and demand, with the number of homebuyers down for the second consecutive month in September compared to steadily rising demand in H1.
The number of new buyers registering with estate agents in September fell 2.6%, following a 1.6% drop in August.
Meanwhile, over the nine months to September, the number of new properties coming to market grew 22% compared to an 11% increase in demand.
Hometrack warned that demand is likely to drop back further during the final months of the year as consumer confidence continues to be hit by the economic uncertainty in the UK and eurozone.
Richard Donnell, director of research at Hometrack, said: “The September survey shows a clear shift in the balance between supply and demand in the housing market, with the number of people looking to buy falling for the second month in a row.
“Events in the eurozone, together with pressures on the domestic economy and household incomes are clearly taking their toll on consumer confidence.
“We expect demand to continue to slip back over the final few months of the year. This will compound the gap between supply and demand and suggests a likely acceleration in the level of monthly price falls over the final quarter of the year.”
Property prices fell for the 15 consecutive month in September, down by 0.1%, with the level of price falls highest over the second half of 2010 at 0.5% a month, compared to 0.1% over H1 2011.
London continues to buoy national average prices, with average house price growth of 0.2% a month.
However, regional differences remain stark, with 25% of the UK recording house price falls in September.
The percentage of the asking price being achieved was lowest in northern England, at around 91%, compared to a national average of 92.6% in September.
Donnell said: “The wider the gap between asking and achieved, the less slack there is to absorb weaker demand. In the short-term we see above average price falls registering in the housing markets in the north of the country.”
Properties in the North, Midlands and Wales also continue to see the longest time on the market at an average of 11 weeks before an offer is made, compared to eight weeks in southern England and just over six weeks in London.
While sales volumes grew 2% in September, weaker demand is likely to hit sales and, combined with price falls, could lead to re-pricing across the market, Hometrack said.
Donnell said estate agents and surveyors are reporting increasing pressure from sellers looking to secure sales before the end of the year, while a rising number of properties are not selling.
He said: “These are typically properties which do not easily fit the profile of demand for the local market and are likely to be seen as overpriced.
“In order to attract buyers and enable sales to take place, these properties will be subject to price adjustments and ultimately kick-start a new phase of re-pricing across the market.”
