Pressure on house prices in
Prices fell for the eighth month in a row, falling 0.5 per cent during the month after a 0.6 per cent drop in April, the Hometrack survey found. The annual rate of decline increased to 1.9 per cent, the biggest fall since November 2005.
Buyers became more wary as 6.7 per cent fewer registered with estate agents in May, compared with a 2.8 per cent fall a month earlier. The supply of housing for sale has risen by 7 per cent in the last two months and by a fifth since February.
The mismatch between supply and demand has taken its toll on the prop-ortion of asking prices achieved, which slipped to 92.3 per cent the lowest since the survey began in 2001.
Richard Donnell, Hometrack's director of research, said the number of home sales this year was likely to be 30 per cent lower than last year, and to be the lowest level for 30 years. He said: "It is too early to say whether the level of monthly falls will now start to moderate as this will require an improvement in demand and sales agreed, which are both linked to overall buyer confidence. The current trends in the survey indicate that pricing looks set to remain under downward pressure over the coming months."
The extent of price falls widened, with 53 per cent of postcodes registering falls, up from 51.4 per cent in April. But the fall in headline prices was slightly lower 0.5 per cent compared with 0.6 per cent. Hometrack said that the data suggested a delay until buyers and sellers reached agreement on prices rather than the beginnings of a slump. Mr Donnell said: "In order to get sizable price falls, a large majority of transactions need to be 'forced' sales which are mostly prevalent in periods of rising unemployment and recession.
"The fall in buyer confidence over the last six months has certainly impacted on transaction volumes but we do not believe that this is a precursor to a major rise in forced sales and large price falls."
Nationwide, the country's biggest building soc-iety, predicted that this year would remain difficult for the housing and mortgage markets, with prices continuing to fall. But the society echoed predictions of rivals such as
The Hometrack survey also showed an increase in the time taken to sell a property, which stands at 9.8 weeks, up from 5.8 weeks a year earlier. The survey gathers data from 3,500 surveyors and estate agents across all 2,330 postcodes in
Source: Independent.co.uk