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House price decline slows London market for the first time

The first four months of the year saw a strong rise in the number of buyers registering with agents which in turn drove prices.  But as the seasonal slowdown begins and the economy continues to weaken, so demand for housing is falling back.

Nationally demand fell by 2.1% in July, while the South East saw the greatest decline (-3.4%). London also registered an above average fall in new buy registrations (-2.4%).

Levels of supply continued to grow – albeit at a relatively steady pace – over the month. The number of new properties coming to the market grew by 1.4% in July and by 5.2% over the last three months. Over the same period demand fell by 2.2%.

The gap between supply and demand (see figure 2) is set to widen over the summer months and points to further modest price galls through the summer and autumn.

Prices fell across eight out of ten regions in July. London was the only region to register a price increase in July, up 0.1%, but the rate of growth has slowed. The number of postcodes in the capital registering price falls has started to increase although overall there are still more areas posting rises than falls in July.

The slowdown in the South East continued over the month with prices down across 35% of postcodes – above the national average.

Away from London and the South East prices remain under downward pressure. However there is evidence that price falls may start to slow as the proportion of asking price being achieved in Northern regions has improved over recent months.

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