House prices down by 0.9% in August

House prices in August fell for the eleventh month - down 0.9%, compared to 1.2% the previous month, Hometrack has said.

On a year on year basis prices are down by 5.3%, the lowest level since the survey began in 2001.

Average house prices were down across more than half (58%) of the country, over August, although the overall monthly fall was lower. Interestingly the proportion of asking price being achieved is starting to level off - this now averages 90.7% - down marginally over the last month, although still well down on the 95.7% recorded in spring 2007.

Demand remains weak, but some agents reporting signs of buyer interest…
Demand may remain weak with continued falls in new buyer registrations over August, but a small - and growing - proportion of agents are reporting some improved signs of buyer interest on the back of lower prices a modest reduction in the cost of mortgages.

Supply continues to fall back…
The August survey shows a continued slowdown in the number of homes coming to the market. A sharp (20%+) increase in the supply of homes for sale over the spring exacerbated the level of price falls over the second quarter of 2008. The last 3 months has seen a noticeable tailing off in the volume of homes coming to the market (+2%) - particularly over August when supply fell back by 0.7%.

But properties taking longer to sell…
The average time a property remains on the market before going under offer, continues to rise and now stands at 11.3 weeks. But the number of viewings to achieve a sale fell for the first time in 11 months.

Evidence from the latest survey may suggest that the level of price falls is beginning to moderate, but a recovery in the housing market remains some way off. Realistic pricing and confidence over the outlook for job prospects and the wider economy is fundamental to any sustained turnaround in market conditions.