The housing market is showing no signs of recovery, a leading property website said today as it published figures showing prices fell again last month.

And according the firm’s housing economist, John Wrigglesworth, what seems to be missing is simply buyer confidence.

The Hometrack July survey of the national housing market reports a fall of -0.2%, repeating May’s -0.2% drop. House prices have now been falling for 13 months and the national average house price now stands at £161,300, down from a peak of £167,700 in June last year and down over 3.7% in the past 12 months.

Despite further house price falls this month, activity in the market is still increasing, albeit at a slower rate than the last few months. Sales agreed have risen just 3% compared with 3.5% last month and 7.6% in May’s survey.

This slowing increase can be explained by a fall in the number of buyers coming on to the market of -0.3%, a continued decline from -0.1% in June (+2.2% in May’s survey). With fewer buyers and a continued increase in properties available, the resulting oversupply means that it is still a buyer’s market and prices will inevitably decrease again in the coming months.

Sales price as a percentage of asking price has fallen fractionally this month to 93.4% (93.5% in June’s survey), indicating that buyers are negotiating larger discounts as sellers continue to set unrealistic asking prices.

The amount of time it is taking to sell a house has increased to 7.8 weeks this month (7.6 weeks in June’s survey), whereas 12 months ago houses were taking just 4.9 weeks to sell. This is largely due to the simple fact that there is an oversupply of properties and buyers have a greater choice. Despite this, the average number of viewings has remained stable at 12.5.

Only one county has seen price rises this month, 17 have remained static and 39 have seen price falls. The only county to report a price rise at the top end of the scale is Berkshire (0.1%).

Counties remaining stable include Cambridgeshire (0.0%), Kent (0.0%), Mid Wales (0.0%), and London – North (0.0%). The counties reporting the largest falls are Hereford and Worcester (-0.9%), West Midlands (-0.8%), Teesside (-0.6%), Northumberland (-0.6%) and Dorset (-0.6%).

Of the cities, just 2 have seen price rises, 26 remained static and 26 have seen price falls. The top two are Bath (0.2%) and Norwich (0.1%), with other static towns including Canterbury (0.0%),

Hull (0.0%) and Salisbury (0.0%). The cities reporting the worst falls are Welwyn Garden City (-2.0%), Middlesbrough (-1.6%), Bournemouth (-1.6%), Ipswich (-1.5%), and Coventry (-1.5%).

John Wriglesworth, Hometrack’s Housing Economist, comments: "While housing transactions have grown slightly all other indicators: prices; time to sell; numbers of buyers etc; are worsening. While interest rates are now expected to reduce next month this has so far not fed through to increased buyers."

"However, the key factors that determine the health of the market remain positive: high employment; rising household incomes; low interest rates. What seems to be missing is simply buyer confidence."

"Confidence has been dented by worries of further house price falls, delaying purchasing decisions. Hopefully once an interest reduction has occurred, confidence will be given a boost. Meanwhile sellers must accept lower prices if they wish to secure a buyer."

"House prices have been falling for well over a year now. We now expect prices to fall by 5% this year, before levelling off in 2006."