UK Housing Survey June

House prices fell for the tenth month in a row in July according to the latest national housing market survey from Hometrack, the Housing Intelligence Business. Average prices were down by 1.2% over the month, compared to a 1% fall the previous month. Prices fell on average by 4.4% over the last 12 months, the lowest annual rate of growth since the survey began in 2001.

"Indicators of market activity across the housing market remain weak with the survey highlighting a 20% drop in demand over the last three months," comments Richard Donnell, Hometrack's Director of Research.

"Transaction volumes have been the greatest casualty of the decline in demand over the last 12 months - the vast majority of homeowners simply do not need to move. This is also reflected in the fact there has been no major expansion in the supply of homes for sale over the last quarter. Despite this, achievable house prices have slipped by 4.4% over the last year and are now back to levels last seen in October 2006.

"The majority of recent price falls have been concentrated in southern England where prices have declined off a relatively high base after the strong growth through 2006 and the first half of 2007. With no immediate end in sight to the current uncertainty, activity levels are likely to remain suppressed with prices remaining under pressure into the autumn."

The increased downward pressure on prices over July is reflected in the proportion of the asking price being achieved, which has slipped from 91.6% to 90.9% over the last month and is now at the lowest level since the survey began in 2001. A year ago the proportion of the asking price being achieved was 95.1%. On a regional basis pricing is weakest in London and the South West where the proportion of the asking price achieved is just 90.2%. The highest is 92.4% in Yorkshire and Humberside.

The survey also shows a further increase in the time taken to sell property which now stands at 11 weeks up from 6.5 weeks in June 2007.

In terms of the distribution of price falls across the country, the survey highlights how the number of postcodes seeing price falls has increased over the month with average prices down across 65% of the country compared to 59% last month. On a regional basis the greatest concentration of price falls were found in London with 77% of the capital registering price falls over July with an average drop of -1.3% over the month. This was followed by the South East where prices were down across 69% of the region followed by the South West (64%).

While southern England is registering the greatest concentration of price falls in terms of areas, the average price fall over the last 12 months ranges between -5.2% in the South West to -5.1% in London and -4.6% in the South East. But as Donnell points out, "These falls represent modest declines off a high base as all these regions saw relatively strong house price growth between 2006 and mid 2007. In London, for example, prices today are back to a level last seen in February 2007."