<a href="http://www.cityam.com/house-prices">House prices</a> across the country fell for the first time in seven months in July, with even resilient London and the south east of England seeing a slowdown in growth, claims research out today from Hometrack.
Rising house prices in London and the south east have been offsetting the decline across the rest of the country in recent months, but this trend appears to be running out of steam.
Across England and Wales as a whole, prices slipped 0.1 per cent in July, having been flat in June, driven by a 2.1 per cent fall in demand, the biggest drop in six months.
Meanwhile supply, measured by new property listings, rose by 1.4 per cent. The gap between supply and demand is forecast to widen during the traditionally slower summer months, pointing to a further fall in prices.
Growth in London slowed to just 0.1 per cent, while the south east inched down 0.1 per cent, as a drop in new buyer registrations hit even formerly robust markets. Numbers fell 2.4 per cent in London and 3.4 per cent in the south east.
“House prices are particularly sensitive to changes in levels of demand and during the first four months of the year there was a strong rise in the number of buyers registering with agents – especially in southern England – with this came price rises,” said Richard Donnell, Hometrack director of research.
“Now, however, demand is starting to falter across the board,” Donnell added. “The seasonal downturn has begun and this combined with a weakening economy is impacting on demand for housing.”
The picture for London is not entirely one of decline, with more postcode areas seeing price increases than declines. However, the proportion reporting falls is higher than at any point since December last year, and the proportion recording increases is at a six month low.
For the country as a whole, just 7.2 per cent of postcode districts saw an average increase in prices, compared to almost a third whose prices were down.
Average time on the market also increased, up at 9.5 weeks, from 9.4 weeks in June, indicating a weaker housing market overall.
And though the proportion of sellers achieving their asking prices in a sale remained flat as a national average at 93.1 per cent, that was only due to weaker pricing in London being offset by an improvement in the north east.
For homeowners, this adds to a raft of gloomy economic data, most prominently the 0.7 per cent drop-off in GDP in the second quarter, revealed last week.
The property slowdown also suggests that falling pay and bonuses among the large financial institutions as well as in smaller wealth management firms is beginning to take its toll on the real estate market in London and nearby regions.
The Hometrack data is taken from a survey of 1,500 agents and surveyors across all counties in England and Wales.