Property prices dropped again this month.
Homes in England and Wales have dropped in price for the second month in a row.
House prices fell by 0.8% in October marking the second consecutive period where month-on-month prices dropped, according to the Land Registry.
The report showed that the average house price now stands at £165,505 with Yorkshire and the Humber experiencing the largest drop – prices in the northern region fell by 1.8% leaving the average property valued at £126,292.
Property economist at Capital Economics, Paul Diggle, said: “The second consecutive monthly drop in the Land Registry measure of house prices is further evidence that the devaluation is becoming more embedded”.
He continued: “The fact that house prices are still overvalued across a range of measures, combined with the poor outlook for the underlying economic drivers of the housing market, means that house prices are likely to fall considerably further next year”.
One reason for the consecutive price drop has been the lack of first time buyers in the property market who traditionally boost prices and competition. This demographic is finding it difficult to secure a mortgage due to the large deposits that banks demand, leaving fewer buyers in a position to purchase their first home.
More properties are also coming on to the market and due to the shortage in buyers many sellers are reluctantly reducing their prices to secure a quick deal.
Another report, by property information group Hometrack, also a 0.8% fall in relation to this month’s prices.
Richard Donnell, director of research at the firm, said: “The seasonal slowdown in the housing market has kicked in a month early, with demand for housing falling at the fastest rate for 20 months”.
He predicted a continued fall over the next few months and through to early next year: “Concerns over the economic outlook on the back of recent spending cuts, together with widespread expectations that house prices are set for a period of retrenchment, are driving the continued weakness in demand. It is inevitable that this trend will continue as we move into the new year from both a seasonal and sentiment perspective”.