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UK property prices fell marginally in August, index shows

Prices fell 0.1% and are now 3.7% below the August 2010 level, according to the figures from property data firm Hometrack.

‘Weak consumer sentiment, pressure on household incomes and the uncertain economic outlook are likely to see demand weaken further over the remainder of the year,’ said Richard Donnell, director of research at Hometrack.

‘This is likely to accelerate the downward pressure on prices over the autumn,’ he explained, adding that despite weak consumer sentiment the housing market is currently in broad equilibrium.

The index also shows that the balance between supply and demand has improved significantly over the last six months largely as a result of steady growth in demand since the beginning of the year.

‘An improved supply/demand balance together with a rising number of sales agreed, up 20% in the last two months, indicate that current pricing levels are broadly sustainable,’ said Donnell.

The proportion of the asking price achieved has remained at around 92.7% for the last six months with sellers accepting, on average, a 7% reduction in the asking price to achieved price.
Improving sales volumes have reduced the average time on the market to 9.4 weeks in July down from 9.7 weeks in June.

But it also shows that there are wide variations to the headline trend in prices. Average prices were up by 0.3% in London and East Anglia in July but fell across all other regions. Prices were down by as much as 0.6% in the South West.

Across the whole country prices moved higher across 8% of postcodes, primarily in London. Prices were lower across 27% of postcodes with two fifths of the falling areas located in the South East and South West. Here prices fell from a high base in the face of slowing demand and above average growth in supply.