Published at 05:35, Friday, 03 October 2008

Homes are selling for a record discount as house prices continue to tumble, figures have shown. The average seller in England and Wales got just 90 per cent of their asking price during September, the lowest level since property intelligence group Hometrack first launched its index in 2001.

Take note: Houses are making just 90 per cent of their asking price and 5.3 per cent fewer people started house-hunting in September than in August

The figures were supported by research from the Royal Institution of Chartered Surveyors (RICS), which said sellers in some areas of the country were accepting discounts of 12.5 per cent of their asking price.

Hometrack said house prices fell for the 12th month in a row during September, losing a further one per cent of their value, and it warned that transaction levels looked set to fall back to a level not seen since the 1960s.

The latest drop helped to push up the annual rate of decline to a record level of 6.2 per cent for the year to the end of September.

The group also recorded a further fall in the number of new buyers registering with estate agents as confidence continued to be hit, with 5.3 per cent fewer people starting the househunting process in September compared with August.

There was also a 1.5 per cent fall in the number of people putting their property on the market during the month, while the amount of time homes are taking to sell continued to increase to 11.5 weeks.

The group said the recent events in the world financial markets were creating unprecedented levels of uncertainty among UK households.

Richard Donnell, Hometrack’s director of research, said: “The number of homes set to change hands in 2008 is likely to fall to a level not seen since the 1960s.

“Weak demand continues to put a downward pressure on house prices and looking ahead it is very hard to identify the mechanisms by which the current cycle of weak confidence, declining sales volumes and falling prices can be reversed in the near future.”

House prices fell in 65.5 per cent of postcode districts in England and Wales during the month, while 12 per cent of areas have seen double digit falls during the past year.

On a regional basis, house price falls were sharpest in the South East during September at 1.1 per cent, while East Anglia, Greater London, the South West and the West Midlands saw drops of 1 per cent.

The North and Yorkshire and Humberside saw the smallest drops, but even here property lost 0.7 per cent of its value.

Meanwhile, RICS said the average home was currently being sold for nine per cent less than its asking price.

It said sellers in the North were accepting the lowest offers at 12.5 per cent below what they had asked for, while homeowners in the North West, East Midlands, West Midlands and Wales were accepting up to 10 per cent less than they had hoped for.

Asking prices in Scotland are currently the least affected, with sellers having to discount their homes by just 2.4 per cent to secure a sale.

But RICS said price falls in Scotland had lagged significantly behind the UK, and it is likely that the gap will widen in the coming months.

Around 82 per cent of surveyors in the North West said the percentage of their asking price that sellers were achieving had fallen during August, something 75 per cent of surveyors in the West Midlands had seen.

But 67 per cent of surveyors in London said the selling price had remained unchanged at 8.5 per cent less than the asking price.

Simon Rubinsohn, RICS chief economist, said: “With housing transactions currently at a 30-year low, many vendors are being forced to lower their asking prices to achieve a sale in an ever shrinking market or they are being forced to rent their property until the market picks up.

“The gap between asking prices and selling prices could widen in the coming months as the downturn in the economy becomes more visible.”

Published by http://www.cumberlandnews.co.uk