House prices drop for first time in seven months

House prices in the UK dropped for the first time in seven months, according to the Hometrack Monthly National Housing Survey.

Notably, Hometrack also said that London and the South East, areas that have so far evaded the pricing crash, are beginning to slow down. According to the survey, the national average house price dipped by 0.1 per cent in July, after a stagnant June and a 0.2 per cent rise in May. It claims that the reason for the turnaround is down to the decrease in potential buyers registering, which increased greatly earlier in the year. It dropped 2.1 per cent in July, following a 0.1 per cent drop in June. Sales agreed increased, although the increase dropped in comparison to June, going from 7.3 per cent to 1.5 per cent. The average time on the market continues to rise slightly. It was 9.5 weeks in July, compared to 9.4 weeks in June and 9.3 weeks in May. Hometrack director of research Richard Donnell said: “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 - and with this came price rises. “Now, however, demand is starting to falter across the board. The seasonal downturn has begun and this combined with a weakening economy is impacting on demand for housing. “Weaker demand is to be expected over the summer months but compared to previous years, the seasonal slowdown has started earlier and developed more rapidly than in previous years. This reflects growing concern over the UK’s economy and the deepening Eurozone crisis.”