It said that the rising imbalance between supply and demand points to an increasing acceleration of property price falls in the coming months, with demand down for the third consecutive month in October by 0.2% as weak consumer confidence continued to hold sway, as supply rose 1.3% during the month.
Over the last six months, supply has increased 11%.
Nevertheless, the number of house sales agreed in October was up 6.3% compared to 2% in September and 3.8% in October 2010, as vendors looked to agree sales and move before the end of the year.
On a monthly basis, Hometrack found that average house price fell 0.2% in October, compared to drops of 0.1% over the previous five months. Year-on-year negative house price growth has slowed to -2.8% compared to -3.5% in September.
Above average house price falls were recorded in the West Midlands (-0.6%), East Midlands (-0.4%) and the North East (-0.4%), while London house prices were static in October.
Hometrack highlighted that this is the first time in seven consecutive months that house prices have not increased in the capital. It said that the slowdown will impact the scale of national changes over the coming months, given that London house price increases flatter the headline rate.
Weaker housebuyer demand has begun to impact the average time properties sit on the market rising over the last three months from 9.5 weeks in July to 9.8 weeks in October.
Richard Donnell, director of research at Hometrack, said: “Growing consumer concern over the outlook for the economy is beginning to impact directly on house prices according to evidence from the latest monthly housing market survey from Hometrack.
“While headline prices have held up across London over recent months, there are parts of the capital where prices have drifted downwards – South East London saw prices down 0.3% over October.
“Price falls are being felt in areas with weaker domestic demand. This is in contrast to central London where the housing market is being primarily driven by international demand and equity.
“The increase in price falls comes on the back of a continued lack of potential buyers. The evidence is clear that buyers are drifting away from the market in the face of weak consumer confidence and concerns over the prospects for the economy and their household finances.”
