Property slides 14 per cent in a year

It now takes an average of 12 weeks to sell a property. In October 2007 it took 7.4 weeks.

Nationwide’s chief economist Fionnuala Earley said: “In some ways this lack of activity is puzzling given that the last time turnover rates approached this level was in the early ’90s when market conditions appeared more hostile.
“In 1991 interest rates were more than twice the level of today and the economy was in the midst of a deep recession.
“This suggests that there are other factors playing a part in the current market.�

The price of a typical house is now £158,872 – almost £30,000 less than a year ago.

However, the sharp fall in prices has not led to an increase in market activity.

Ms Earley said: “One possible explanation for this is that it is only those sellers willing to negotiate on price that are seeing sales go through.
“Consumers still expect prices to continue to fall into 2009 and will therefore be reluctant to trade without some discount on the asking price.�

The official data proves there was a bigger decline in the UK than expected, and economists say a recession is almost certain.

But it is not all bad news according to Fionnuala.

She said: “The speed of the slowdown and the determination of banks to return stability to the markets means interest rates are likely to continue to be cut sharply, which will make life easier for many borrowers.�

Meanwhile, the Chesterton CEBR House Price Poll of Poll for October reveals that the average price of a residential property in England and Wales fell to £178,534 in October, with average house price now 9.5 per cent lower than in October 2007.

Prices in London fell by 1.5 per cent in October in line with national trends. House price declines in the capital have accelerated in recent months with six months in succession of falls bringing the annual decline in house prices to 7.7 per cent, according to the poll.

Douglas McWilliams, chief executive of CEBR, said: “The effect of bank lending running at a trickle has been a marked reduction in housing market activity and prices – but as the cycle evolves investment opportunities are emerging for those successfully negotiating the credit crunch.�

CEO of Chesterton Robert Bartlett said: “The rapid falls that have been witnessed this year, combined with the collapse in the banking sector may well have accelerated the point at which we strike the bottom of the market – I’m not sure we have reached that point yet, but we are much closer and already a large number of prospective cash purchasers have started to look more closely at the London market.
“I definitely believe transactional volumes will increase within the next quarter.�
“There are always those that need to buy, sell or rent whatever the market is doing. This is a market where we must concentrate on client service and for us to act as true enablers to ensure that transactions are completed.�

The latest data from Haart estate agents paints a slightly better picture. After a turbulent month in October, average London house prices took another slight knock, falling by 0.9 per cent from £247,271 in September to £245,036, according to its figures.

Haart said the positive effects of the Government’s bank bail out plan and the base rate cut had been lessened by talk of a recession and continued restrictions on mortgage lending.

Haart said prices in the capital had fallen by more than 15 per cent, with the latest decline of 0.9 per cent.

Prices were unlikely to drop more than two per cent further before the end of the year.

Estate agents had reported that vendors had become realistic with the pricing of their properties and mid range and lower end homes were selling as a result.

Managing Director of Haart Russell Jervis said: “Despite the threat of a recession knocking consumer confidence, vendors who are prepared to accept estate agents’ advice and adjust their price expectations in line with the market are having success in agreeing a sale.
“This is particularly true as buyers are beginning to take the opportunity to move up the ladder while prices are low, which is something that many were struggling to do in 2007.�