House prices fell 0.4 per cent in the north west this month in a sluggish start to 2011 which showed the market’s underlying weakness is more pronounced than a year ago, a report said today.

Research by Hometrack, which surveyed more than 5,000 agents and surveyors nationwide, showed a 4.7 per cent fall in the number of new properties listed for sale in the region and 6.9 per cent fewer new buyers.

Hometrack said 8.6 per cent fewer sales were agreed and that properties were on the market for an average of 12.7 weeks before a deal. They commanded an average of 91.7 per cent of their asking price.

Nationally, house prices fell by 0.5 per cent in January and the market saw a 5.4 per cent reduction in supply, the largest monthly fall for four years, and a 9.5 per cent decline in the number of new buyers.

The average house price nationally stood at £153,600, the report said.

Hometrack’s director of research Richard Donnell said a seasonal fall was not unexpected in January but that the market’s underlying weakness is far more pronounced this year than last.

He warned demand could be dampened further in the coming months as household budgets are squeezed by rising taxes and by the prospect of higher interest rates, leading to further falls in prices.