House price recovery warning
The recent recovery in house prices might be about to slow after new research revealed the number of home buyers coming to the market has started to drop. According to the latest survey from Hometrack, house prices increased by 0.2% in October to £156,400, the third consecutive month of improvement. Rising demand and a lack of housing for sale have been credited with causing the improvement, while the discount between selling and asking prices has returned to a level last seen at the start of the credit crunch over two years ago. However, growth in the number of new buyers registering with agents has eased considerably to average just 1.1% a month over the last three months, compared with 7.5% during the spring and early summer. "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," said Richard Donnell, Hometrack's director of research. "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."