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Time to sell jumps as housing demand weakens

Summary	July-12	Aug-12	Sept-12	Change
Monthly price change (%)	-0.1	-0.1	-0.1
% change in new buyers registering with agents	-2.1	-1.3	-3.6
% change in volume of property listing	1.4	0.8	-0.9
% change in sales agreed	1.5	6.4	-0.4
Average time on the market (weeks)	9.5	9.5	9.9
% of the asking price being achieved	93.1	93.0	93.0
% postcode districts with price increase over month	7.2	3.6	6.0
% postcode districts with price decrease over month	31.6	27.1	23.6

Results at a glance

• Average house prices fell for the third month in a row as demand weakened, the number of sales agreed fell and unsold stock was re-priced.

• 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.

• 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 – see figure 4.

• 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.

Figure 1 The proportion of asking price achieved remained static this month at 93.0%.  The time on the market has increased to 9.9 weeks, a rise from 9.5 (August) with some major regional variations across the country.	Time on market and % asking price achieved
Figure 2 The balance between supply and demand leads underlying house price changes by 3 months.  The improved balance over the first half of 2011 led an improvement in the underlying rate of growth.	Supply demand balance leads price changes by 3 months
Figure 3 Figure 3 shows the proportion of postcodes registering higher and lower prices over time.  The balance of change swung into negative territory over the autumn of 2010 but the extent of price changes has slowed as supply has tightened.  Prices were down across 23.6% of postcodes in September 2012.	Proportion of the country registering higher and lower prices