House prices drop for the first time in two years

News Category: Industry News

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House prices dropped in England and Wales during October for the first time in two years, a new report has suggested.

Property firm Hometrack revealed that house prices fell by 0.1 per cent over the month, as a result of higher interest rates and falling confidence.

According to the survey, the fall follows two months of stagnation and means that the annual rate of house price inflation also dipped to 4.4 per cent.

"The fall in prices over October is not unexpected. After several months of weaker buyer confidence, falling levels of demand and declining sales volumes, prices were bound to be affected," commented Richard Donnell, Hometrack's director of research.

"We expect further small price falls in the months ahead but these are likely to remain limited as there remains no evidence of any increase in the supply of homes for sale."

"If anything the current uncertainty appears to be resulting in a decline in the numbers of homes coming to the market which is likely to support underlying prices in the coming months."

However, Ernst & Young's Item Club revealed last week that it did not expect house prices in the UK to crash in the coming months.

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