UK house prices fell by 0.1 per cent in August, according to a new study by property analytics firm Hometrack.
This is the same fall in property prices as was seen in July. Hometrack say the fall in house prices is due to a widening discrepancy in the supply/demand balance of the property market which points to further price falls in future months.
Nationally, demand fell by an increased level of 1.3 per cent, whilst the supply of properties increased by 0.8 per cent. Over the past year, Hometrack says that demand has risen by ten per cent over the past year but supply has grown by 19 per cent.
Richard Donnell Director of Research at Hometrack, said: “Overall, the survey paints a picture of an uncertain market compounded by seasonal factors, a prolonged period of bad weather and the Olympics. Correctly priced property is selling within a reasonable time.”
This means that even in London house prices did not go up in August, the first time this has happened in the capital this year.
The fall in prices across most regions in the UK was at a lower rate than previously seen. No region recorded a fall of more than 0.2 per cent. House prices went up in just 3.6 per cent of areas in the UK, whilst 27.1 per cent of areas registered falls in house prices.
Hometrack reports that across the UK it takes an average of 9.5 weeks to sell a home, but this rises to 12 weeks in the north of England.
Property sales agreed in August rose by a surprising 6.5 per cent. This was from a low base and was due to delayed sales in July because of the Olympic Games and wet weather.
Richard Donnell said: “The main change recorded by this national survey of 1,500 agents and surveyors was an unseasonal increase in the number of sales agreed - up 6.5% - at a time in the year when sales volumes would tend to decline rather than rise.”
Hometrack reports that overall the UK property market remains fragile because of a combination of one-off factors and a weakening of the supply and demand balance which points to further downward pressures on property prices for the rest of the year.