Auction prices fall by 23 per cent

Calculations by Liberal Democrat Treasury Spokesperson, Lord Oakeshott, show that the average price of the 3,993 houses sold at auction between June and August this year was £130,400, 23.4% lower than the £170,300 average during the same period last year.

These falls in percentage terms are about double those being seen in the current house price indices. This may well be due to the fact that much auction property is bought with a view to refurbishment and resale or rental and any current prediction of a decline in the market will be factored in by those bidding at auction.

It maybe that we therefore shouldn't read too much into these figures, however commenting, Lord Oakeshott said: “These dramatic figures show just how fast house prices are falling at the sharp end. The published house price indices are well behind the curve.

“Property professionals are now pricing in a fall of 31% in the Halifax House Price Index from its peak this January to the bottom in 2011, followed by a very slow recovery. Suspending 1% stamp duty is like standing in front of a runaway train. It is pointless at best, and could be downright dangerous if it ends up sucking vulnerable first time buyers into negative equity.

“The Government must do far more to empower housing associations and councils to buy unsold homes and land, which would save our building industry from collapse."