Last updated 05:28, Friday, 30 May 2008

House prices fell for the eighth month in a row in May as a “buyer’s strike” continued to grip the market, figures suggested today.

Desperate measures: Howard and Sally Wilson are so keen to sell their house in Lowry Hill, Carlisle, that they are throwing in a Vauxhall Astra car and a week's holiday in a Spanish villa

Information group Hometrack said the average value of a home in England and Wales fell by 0.5 per cent during the month to stand at £172,200.

The drop follows a 0.6 per cent price fall in April and leaves houses costing 1.9 per cent less than they did a year ago, according to the firm.

Hometrack’s research director Richard Donnell blamed the further slide on a 6.7 per cent drop in the number of buyers registering with agents, a deterioration from the 2.8 per cent reduction last month.

“What we referred to last month as the ‘buyer’s strike’ continues,” he said.

Mr Donnell said the scale of the downward pressure on prices was highlighted by the proportion of sales where the asking price being achieved. It has slipped from 93 per cent to 92.3 per cent over the last month and is now at the lowest level since the survey began in 2001.

The survey also showed an increase in the time taken to sell a property which now stands at 9.8 weeks, up three weeks from 5.8 weeks a year ago.

Price drops were recorded in 53 per cent of postcodes registering lower prices over May compared to April, up from 51 per cent the previous month.

The housing market is under increasing pressure due to a combination of stretched affordability and the problems in the mortgage market, caused by the credit crunch.

This year has seen a series of gloomy housing data, including the biggest monthly price drop for 16 years – 2.5 per cent, in March – says Britain’s biggest mortgage lender Halifax Bank of Scotland.

Mr Donnell said only an improvement in buyer confidence could reverse the house price decline.

He said: “The current trends in the survey indicate that pricing looks set to remain under downward pressure over the coming months.

“The fall in buyer confidence over the last six months has certainly impacted on transaction volumes but we do not believe that this is a precursor to a major rise in forced sales and large price falls.

“It seems likely that in that short term prices will continue to edge down until they reach a level where buyers are prepared to commit.”