House prices show fall as pressure grows on incomes

The fall in house prices comes as the number of new buyers registering with estate agents fell 1.2 per cent in August, compared to 1.1 per cent growth in July, as demand for new housing weakened, property analyst Hometrack said.

Elsewhere, the survey showed the percentage of properties being sold for the asking price dropped from 92.7 per cent in July to 92.5 per cent in August, while sales agreed fell by 3.6 per cent and the time properties were on the market increased to 9.5 weeks last month from 9.4 weeks in July.

House prices are set to continue to fall for the remainder of the year, Hometrack warned, as weak consumer sentiment, pressure on incomes and an uncertain economic outlook persist.

Richard Donnell, director of research at Hometrack, said a seasonal decline in buyers in August is to be expected but added “there is no doubt that pressures on household incomes are building and recent survey evidence suggests consumer confidence remains weak”.

He went on: “The time taken to sell a property, is a lead indicator in Hometrack’s monthly housing survey and provides a true insight into the relative health of the housing market.

“For 33 per cent of the country, this figure now stands at over three months, with the gap between London and the north becoming increasingly wider.”

Mr Donnell said there was continuing evidence of a widening north-south divide.

London has driven any house prices over the year while the overall trend has been downward across all other regions.

The differential in performance is stark, Hometrack said, with price changes in London remaining positive in each of the last six months, compared with all other regions where prices have largely fallen or remained static.