LONDON (Reuters) - House price inflation in England and Wales dropped to 7.9 percent year-on-year in the month to November 10 from 10.4 percent the previous month, a survey by property website Rightmove shows.
The survey showed house prices fell on the month in all regions bar London where demand continues to outstrip supply, pushing prices up 2.3 percent on the month.
Rightmove attributed an overall 0.7 percent fall in monthly figures, which are not adjusted for seasonal factors, partly to an early onset of the seasonal decline in winter sales.
The drop in annual inflation added weight to the widespread view that the housing market is slowing in response to higher borrowing costs.
House prices in Britain have more than doubled in the last five years but are expected to stagnate in the wake of the credit crunch.
“Prices are set to flatline in 2008. 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,” said Rightmove commercial director Miles Shipside.
“In these areas motivated sellers are starting to cut their prices,” he added.
The amount of time it took to sell a property jumped from 85 days to 92 days.
Rightmove said it expected mortgage lending figures to continue to drop over the next few months as a result of the fall in sales activity.
“A slump in mortgage demand ... is a further sign of the need for a downward movement in interest rates early in the New Year to boost the current low volume of sales,” the report said.
The Bank of England signalled on Wednesday that it would need to cut interest rates in the next few months due to a worsening outlook for economic growth.