Its latest survey revealed that demand from buyers fell 11% over H2 2011, with the net result of new buyer registrations dropping 23% between August 2011 and January.
Supply also continued to tighten in January, with the number of property listings dropping 5.4% during the month and sales agreed down 14.3%. Supply contracted a total of 7% over the last six months – the largest drop since 2009, Hometrack said.
England, excluding London, has seen the largest decline in demand over the last six months, but from a high base.
Hometrack figures also showed that house prices remained flat in January, with no national month-on-month increase since June 2010.
Richard Donnell (pictured), director of research at Hometrack, said: “Our latest survey reveals a market dogged by uncertainty.
“On a national basis house prices have not increased over the last 18 months – a theme carried over into January when prices were unchanged. A small rise in London offset falls in other regions. London looks set to buck the national trend again in 2012 thanks to overseas buyers providing a boost to prices in London’s prime areas.
“Elsewhere demand remains constrained by the uncertain economic outlook. Some agents have also reported an increase in down-valuations as surveyors exercise growing caution.”
Donnell added that the “clearest guide to the relative health of the housing market” was the average time properties spend on the market, which increased by 0.1 in January to 10.2 weeks.
Regionally, properties in the North and Midlands spend the longest time on the market at an average of just under three months (11.9 weeks), the same as last year,
Meanwile, in Southern England the average is 9.1 weeks – the highest level for almost three years, as demand weakened and sales periods extended. Nevertheless, London’s average is just 6.5 weeks, down from 6.9 weeks at the beginning of 2011.
Hometrack warned that demand will only improve modestly over the coming months, with further downward pressure on prices as the balance between supply and demand remains negative.
Donnell said: “Given the pressure on household finances and the outlook for the wider economy as a whole, we expect only a modest improvement in levels of demand in the coming months.
“The net effect will be a continued negative balance between supply and demand pointing to further downward pressure on prices in the months ahead.”
