Annual house price inflation at its lowest since 2005

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by Kay Murchie

According to Rightmove, the property website, the average asking price for homes put up for sale in England and Wales has fallen for the third consecutive month, supporting the theory that the property market is heading for a severe downturn.

In the 5 weeks to 12 January, asking prices fell 0.8% reducing the annual rate of increase to 3.4% from 4.8% in December.

Rightmove said there were some indications of an increase in activity immediately in early January with the number of visits to its website up almost 20% from the first 2 weeks of 2007.

Miles Shipside of Rightmove said some homebuyers are now able to find properties that have fallen to a rate they can afford and are bagging what they see as bargains against previous prices.

Mr Shipside added that some properties have had their prices dropped by 10% or more and are now within reach.

However, Rightmove added that much of the monthly price fall was due to the final deadline for sellers to provide Home Information Packs (Hips) for smaller homes, attracting cheaper properties to the market.

Hips were launched on August 1 to include properties with 4-bedrooms or more and rolled-out to include 3-bedroom properties on September 10. They were then extended to included all properties on December 14.

Research from the Halifax bank and the Nationwide building society indicated that the market weakened further in December while mortgage approval levels also fell to a 3-year low in November.