Rightmove: Prices down 0.7 per cent in October

Research released today reveals house prices across England and Wales fell by an average of 0.7 per cent (£1,656) during the month to November 10th.

That is according to RightMove.co.uk, which now says annual house price growth stands at 7.9 per cent.

This is down from the 10.4 per cent recorded in October.

According to the organisation's research the average house price in England and Wales is now £239,986 – down from £241,642 in October.

Falls are part of a wider trend, with prices stagnant for the past four months says RightMove.

As a result prices are expected to fall in real terms as the market moves into 2008.

"Prices are set to flatline in 2008," said Miles Shipside, commercial director of Rightmove.

"While we do not expect a price drop overall, there will be parts of the country that are over-priced and over-supplied for the likely levels of affordability and demand next year."

However, there is unlikely to be a dramatic price correction – as supply outstrips demand across the market, providing some support to property values – but affordability should increase.

Amid tougher conditions the length of time it takes to sell a property has increased – up from 85 days in October to 92 in November.

This represents the highest level since RightMove began compiling information in 2002, with falls in mortgage lending expected to follow in the short-term.

In response RightMove is expecting a cut in interest rates, perhaps in February in an attempt to avoid the surge in prices which followed the last cut.

"The Bank of England will want to be sure that a rate cut will not lead to another surge in house prices, having mistakenly thought they had inflationary pressures under control when they dropped rates in 2005," concluded Mr Shipside.