Housing demand weakens, say Hometrack

The government’s Funding for Lending initiative looks set to support a modest increase in mortgage lending, but an uncertain economic outlook, together with affordability pressures will continue to act as a drag on housing market activity. It seems that pricing will remain under slow downward pressure but a tightening in supply will limit the scale price falls in the short term.

Demand has fallen for the last four consecutive months with September registering the largest fall at -3.6%. Demand in September fell across all regions. This is in contrast to the start of the year when between February and May the number of people registering with agents rose by 25%.
Slowing demand is typically followed by tightening supply. September saw the first monthly decline in supply (-0.9%) following seven months of growth.
  
No region registered price increases in September. House prices were static in London and the south west and fell in all other regions.

The percentage of the asking price achieved remained unchanged at 93%. The greatest gap between asking and achieved prices continues to be in northern regions (8.1%) but the gap is starting to widen in London and the south. The time on the market has increased to 9.9 weeks. In the south east the figure has risen by 10% (to 8.8 weeks) since May. The time on the market for three regions now stands at over three months.