House prices to fall over the next three months: Rightmove

According to the latest Rightmove House Price index, the fall in prices over the last month will be the first of three monthly falls before asking prices resume their recovery in February of next year.

The 1.6 per cent decrease compares with falls of 2.9 per cent in November last year and 0.7 per cent in November 2007. In October the index, the average house price grew by 2.8 per cent to £230,184.

Miles Shipside, commercial director at Rightmove, said: "In all but the most buoyant of markets, home moving comes second to Christmas festivities.

"While the market has recovered from some dreadful lows, this month’s price fall proves that it does not yet have the strength to buck seasonal trends.

"We therefore expect three months of asking price falls before a tentative recovery in early spring, likely followed by pre-election jitters."

The index found that market volumes also remain thin, with the number of new sellers measured this month standing at 89,140.

The number of properties coming to market is now similar to the level recorded at the same time last year, though still some 30 per cent below the volumes seen in 2007.

Mr Shipside added: "Many would-be sellers are still unwilling or unable to come to market, and with the number of new build properties running at half of the levels required to satisfy anticipated demand, aspiring home-movers are set for a frustrating time for years to come."

The extent of the market recovery from the dramatic price falls seen last year is shown by year-on-year price rises in seven out of ten UK regions, resulting in an average national rise of 1.6 per cent compared with November 2008.

A majority of the country now has average asking prices that are above those of twelve months ago.

Only the East Midlands, the North and the North-West remain in negative year-on-year territory.

According to Rightmove, the East Midlands is the worst performer with prices 1.6 per cent below those of November 2008, with the North down 0.6 per cent and the North West just short of break even at minus 0.1 per cent.

Meanwhile, the stamp duty holiday, exempting properties between £125,000 and £175,000 from the 1 per cent tax, is due to end on 31 December.

Analysis of Rightmove's data shows that its impending demise has not caused a rush over the last three months by sellers or buyers looking to take advantage of this tax break.

The proportion of new-to-the-market sellers of properties in this price bracket has remained static at 24 per cent over the last three months, with overall stock levels between £125,000 and £175,000 also remaining consistent at 23 per cent.

Mr Shipside added: "Buyers hopeful of beating the stamp duty deadline should not leave it to the eleventh hour, especially if their legal team are not working over the festive break.