Hometrack's September house price index shows a stagnant market and growth has now completely stalled according to the consultancy's research director, Richard Donnell.
Continued weakness in demand, which dropped 2.1 per cent this month, is behind the loss of momentum with an excess of supply over buyers now for the last three months.
London is experiencing a pronounced slowdown and is the only region to record a price fall this month - albeit of just 0.1 per cent - but Hometrack says more falls are to come.
Almost all of Hometrack's key indicators are now down or stagnating:
Monthly price movement across England and Wales - no change on last month;
New buyers registering with agents - down 2.1 per cent;
Volume of property listings - down 0.3 per cent;
Sales agreed - down 1.6 per cent;
Average time on the market - 6.3 weeks, no change;
Asking price achieved - down 0.1 per cent to 95.8 per cent;
Postcode districts with price increases - 6.3 per cent (19.3 per cent last month);
Postcode districts with price falls - 1.2 per cent.
While this slowdown can be attributed partly to seasonal factors - including a slight hangover from a slow August - agents are wary about the direction of the market as a result of weaker demand and lower sales volumes. Buyer uncertainty is growing in the face of a possible interest rate rise, a general election and recent warnings of a bubble explains Donnell.
Although the lead indicators suggest buyers will start to gain the upper hand, there are many owners who don't need to sell and won't bother unless it's financially beneficial to do so. The net result is a likely drop-off in activity in the coming months he forecasts.
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