Market uncertainty contributing to price falls

The housing market is continuing to slow down as buyers become more apprehensive of future price movements, new research from Hometrack has found.

Prices fell by 0.1 per cent in October, according to the firm's previous report, and continued speculation regarding the softening market has helped create a vicious circle of media and consumer sentiment, the firm has suggested.

This has contributed to a 0.2 per cent fall this month, Hometrack believes, with annual price inflation now down at 3.6 per cent.

"Continuing media focus on the fallout from the credit squeeze, along with relatively high interest rates, is resulting in widespread caution among homeowners, the majority of whom do not need to move," said Richard Donnell, director of research at Hometrack.

"The Christmas slowdown looks to have started early but the underlying market conditions remain weak, with new buyer registrations down by 26 per cent over the last five months," Mr Donnell continued.

Earlier this month the Royal Institution of Chartered Surveyors (Rics) reported that new buyer enquiries had fallen for the 11th month in a row in October.

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