House prices plummet by 10% in a year as market hits record low

The annual rate at which house prices in England and Wales are falling continued to accelerate during October to hit a new record of 10.1 per cent, figures showed today.

The average home lost a further 1.5 per cent of its value during the month to stand at £165,529, according to the Land Registry.

It was the 14th month in a row that the annual rate of growth has declined, leaving property costing around the same as it did in the summer of 2006.

Property for sale signs

Slump: The average home lost a further 1.5 per cent of its value during October

The number of homes changing hands also continued to slide, with an average of only 54,488 properties sold each month between May and August, less than half the average of 118,165 transactions a month during the same period of 2007.

The trend accelerated during August, the last month for which figures are available, with sales totalling 45,437 during the month, 64 per cent fewer than in August last year, with several price bands showing even higher falls.

Only 410 homes were sold for more than £1million during August, less than half of the 922 properties which changed hands for at least seven figures a year earlier.

All areas of England and Wales are now reporting house price falls on both a monthly and annual basis.

Wales has seen the steepest year-on-year price falls at 12 per cent, followed by the south-west at 11.5 per cent and the east at 11.2 per cent.

London has seen the smallest drop in property values, but even there the average house price has fallen by 8.6 per cent during the past year to stand at £320,774.

Wales also saw the biggest fall on a monthly basis, with homes in the region losing a further 2.8 per cent of their value during October, while prices dropped by 2.1 per cent in the south-west and north-east.

Price falls were slowest in the West Midlands at 0.6 per cent, while in the north-west property values eased by one per cent.

The figures come the day after Nationwide Building Society reported some rare good news for homeowners, when it said the rate at which house prices were falling eased during November.

It said prices dropped by just 0.4 per cent during the month, a considerable improvement on October's 1.3 per cent slide, while the annual rate of price falls also slowed to 13.9 per cent, compared with a year-on-year drop of 14.6 per cent a month earlier.

But economists warned that it was too early to talk about a recovery, due to rising unemployment and the continuing mortgage drought.

However, the Bank of England's Monetary Policy Committee is widely expected to cut interest rates again next week, which will provide some support for the market.

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