House prices tumble to lowest level for 40 years

House sales for 2011 are predicted to slump to the lowest level for 40-years - and could slip even further next year. The number of sales this year is expected to fall to around 50% of those at the housing market peak in 2007 at 840,000, according to housing market analysts Hometrack. Not only have the number of sales fallen, but prices are also down - 0.2% in November following a similar fall in October. Year-on-year prices dropped 2.3%, with a series of small falls each month since July 2010. London is the only region bucking the trend as prices have stood still for two months in a row. Hometrack cites reluctance to sell is stabilising prices as estate agents report a decline of 0.8% in homes coming to the market compared with the previous month. "2011 looks set to register the lowest level of housing turnover for 40 years – a trend that we expect to continue into 2012," said Richard Donnell, director or research at Hometrack. "An expected 840,000 sales in 2011 is almost 50% lower than in 2007 and equates to the average private sector home changing hands every 26 years. "This is creating a scarcity if housing and is acting as a support to pricing levels." Meanwhile, the Land Registry reports a 0.9% fall in home prices in England and Wales between September and October. The average price of a home was £159,999. Prices in London rose during the last 12 months by 0.3%, while the North East returned the greatest annual price drop - down 7.2%. The latest data for completed house sales, for August, showed a 1% increase to 62,010 from 61,469 in August 2010. The number of properties sold for more than £1 million dropped by 7% to 714 from 764 in August 2010.

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Siobhan Smith

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