There has been a slow start to the property ladder for 2005 say Hometrack.

Covering January, Hometrack’s survey of the national housing market reported a fall of -0.4%, the seventh consecutive month where UK house prices have fallen.However, this fall is the smallest reported for three months suggesting that house prices may be about to stabilise.

According to the Hometrack survey, the average property price in the UK is at £162,800.

Supply & Demand

Currently houses are taking 7.7 weeks to sell (7.5 when reported in December) and the average number of viewings per house is also down to 12. (12.2 in December).

The market is reporting that supply of homes is exceeding demand, there are less buyers registered with estate agents (dropped by 12.8%). Hometrack has now calculated that there has been an increase in suppy relative to demand for eight consecutive months.

With more houses than buyers, some are taking advantage and buyers are negotiating discounts of over 7% of the asking price.

Regional Ups and Downs

There has been a slight ease on the price falls this month, as four counties remained stable and two reported price rises. The counties at the top end of the scale were North Lincolnshire (0.1%), Warwickshire (0.1%), Central London & City (0.0%), Hereford and Worcester (0.0%), and Suffolk (0.0%).

The counties reporting the largest price falls were Avon (-1.3%), West Midlands (-0.9%), Buckinghamshire (-0.9%), Staffordshire(-0.8%) and Somerset (-0.8%).

The cities reporting the worst falls were Chester (-2.0%), Plymouth (-1.8%), Bath (-1.8%), Stoke (-1.3%) and Lancaster (-1.3%). However, 18 out of the 54 listed cities remained stable or reported price rises. The top five were Warwick (0.4%), Middlesbrough (0.1%), Blackpool (0.0%), Cambridge (0.0%) and Carlisle (0.0%).

John Wriglesworth, Hometrack?s Housing Economist, said:

?The start of 2005 hasn?t brought much good news on the housing market front. House prices have fallen for seven consecutive months and the volume of sales is markedly down on previous months. We are yet to see signs of improvement. House price decreases have been less than previous months, but it isn?t until June that we are likely to see a recovery with house prices moving upwards.

With interest rates forecast to remain stable and mortgages still relatively cheap, demand should improve by the end of the year. We continue to predict 0.0% house price inflation for 2005.?

Earlier this week, both Nationwide and the BBA announced they expected house prices to rise by 2-3% during 2005.

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