House price inflation in England and Wales fell to 4.8 per cent in the month to December 8, its lowest in nearly 2 years, partly due to a surge in the number of smaller homes being put up for sale, a survey by property website Rightmove has shown.
The survey also showed asking prices for homes fell by 3.2 per cent on the month, the biggest fall since the survey began nearly six years ago.
Rightmove said the decline was exacerbated by a larger proportion of smaller properties being put on the market to avoid the cost of having to provide Home Information Packs (HIPs). HIPs include a number of legal documents and a certificate rating the property's energy efficiency.
HIPs were introduced in the summer for larger properties but from December 14 sellers of all properties are obliged to provide them to prospective buyers.
Rightmove said 48 per cent of properties put up for sale in the first week of December had no more than two bedrooms compared with 38 per cent last year. It reckoned that accounted for 1.1 per cent of the 3.2 per cent decline in asking prices.
Rightmove commercial director Miles Shipside said the property market was entering "uncharted territory" in 2008 as tight conditions on global money markets would have a bigger impact on the market than the Bank of England's official bank rate.
"One way or another we need a further 0.5 per cent cut in the cost of credit to borrowers early in 2008 just to return market borrowing rates to where they were before the credit crisis," he said.
