House prices grew by 0.2% in October 2009 – the third consecutive increase which brings the year on year rate of house price growth to -4.2%, Hometrack has said.

The group said that as has been the case for the last six months, an improvement in market sentiment has resulted from a mismatch between demand and a lack of supply.

Over the spring and early summer Hometrack said estate agents were reporting new buyer registrations growing by an average of 7.5% per month. Howevre, over the last three months new buyer registrations average just 1.1% a month. This suggests that the pent up demand that has boosted the market in recent months is starting to fade in the face of firmer pricing and fewer clear bargains.

While the volume of buyers on agents’ books is looking far healthier than six months ago, slower growth in demand could well reduce the upward pressure on prices in the coming months.

Additionally, the average time taken to sell a property is still some 30% off the levels seen at the peak of the market in 2007. The current time to sell averages 8.4 weeks compared to a low of 5.8 weeks seen in May 2007.

Richard Donnell, Director Research, Hometrack added: “House price rises were registered across just 16% of the market. Across the remaining 84% of the country, prices remained static. Like previous months, the majority of price rises and general improvement in market conditions have been concentrated primarily in London. In London prices grew by 0.4% during October and have risen by 1.1% over the last 3 months – more than double the national increase of 0.5% over the same period.

Trends across the market are highly polarised and dependent on local market conditions. The average time to sell in London for example currently stands at 5.3 weeks, this compared to 12 weeks across Wales and 10.9 weeks in the East Midlands.”