Property market slows and cools

The average time it takes to sell a property is the longest it has been for five years and the market is cooling, a leading property expert has claimed.

Howard Archer, chief economist at Global Insight, said the recent report from the Department for Communities and Local Government (DCLG) added to evidence that current market turmoil is affecting prices.

A survey by Rightmove, property advice website, showed that the average time to sell a property was 85 days in the month to mid-October, the longest period since 2002.

The DCLG reported that house price inflation fell to 11.4 per cent in August. Mr Archer noted factors including elevated house prices, modest disposable income growth, cautious lenders, and high interest rates as all contributing to the situation.

Reacting to the report by Rightmove of rising house asking prices, he said: "This was attributed to distortions caused by the introduction of Home Information Packs over the past couple of months in the type of houses coming on to the market."

He noted that speculation of a fall in prices may also be putting off buyers and warned: "There is undeniably a very real risk that the housing market could see a sharp correction over the coming months."

His long term forecast was more positive, predicting that the Bank of England would cut interest rates: "We think it is most likely that house prices will eventually stabilise and then remain essentially flat for an extended period."