According to the housing intelligence business, the average UK house price fell for the eleventh month in a row in August, with a 0.9% drop since last month. The annual average fell by 5.3%, the lowest level since 2001.

Richard Donnell, director of research at Hometrack, said it could take as long as 24 to 36 months for prices to reach realistic levels, but that the market was currently well into that process. “We may well start to see a moderation in the rate of monthly price falls, however, with ever growing uncertainty among households over the broader economic outlook the current re-pricing of housing still has some way to run.

“While the evidence from the latest survey suggests that the level of price falls may be starting to moderate, a recovery in the housing market – even back to zero monthly growth – is still some way off. The reality is that buyers are not likely to return in any volume until they begin to see value in their local housing markets. But realistic pricing represents just one part of the equation – it is confidence over the outlook for job prospects and the wider economy that is fundamental to any sustained turnaround in market conditions.”

The survey also showed sellers were now shying away after a marked increase (20%) in properties coming to market in spring. Over the last three months this has reduced to 2% and in August the figure fell to 0.7%. “Although in part a seasonal trend, this also highlights a reversal in the mentality of sellers in these weaker market conditions,” Donnell explained.

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