HOUSE prices stagnated for the second month running during September as both buyers and sellers sat on their hands, figures showed today.

The average cost of a home in England and Wales remained unchanged at £176,300 during the month, while the annual rate of growth fell back to five per cent down from a recent high of 6.8 per cent in April, according to property group Hometrack .

But the group said despite falling levels of demand and declining sales volumes, a lack of `saleable' homes coming on to the market was preventing prices from falling.

Credit crisis

Instead it said the recent credit crisis had created a period of inertia in the property market, with buyers and sellers both delaying decisions until the outlook was clearer.

Overall prices fell in just four postcode areas across England and Wales during the month, while they rose in just under nine per cent, the lowest level since November 2005.

Last week the Land Registry said prices rose by just 0.2 per cent during August.