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London weakness hits house prices

House prices fell for the sixth month in a row in October, with even London’s market grinding to a halt, according to housing research firm, Hometrack.

There was a 0.2 per cent slide in prices compared with the previous month, sending year-on-year prices down 2.8 per cent.

The West Midlands suffered the largest month-on-month fall with a 0.6 per cent drop in October, but the East Midlands and the North East were also badly hit with 0.4 per cent  falls to both.

Richard Donnell, Hometrack director of research, said the rising prices in London over the past seven months had flattered the overall figures, with the capital’s stagnation in October accounting for the sharper nationwide decline.

He said: “Growing consumer concern over the outlook for the economy is beginning to impact directly on house prices.”

There was little prospect of cheer for housebuilders in the months ahead, with supply set to continue outstripping demand.

“Demand for Housing fell for the third consecutive month in a row [down 0.2 per cent],” he said. “On the supply-side, October registered a 1.3 per cent increase in the number of properties listed with agents. 

“Over the last 6 months supply has grown 11 per cent. The balance between supply and demand is clearly shifting and points to an acceleration in price falls in the coming months.”

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