Boom in house prices is 'well and truly over'

The tide has "definitely" turned against the seller in the housing market, a leading property expert said today as he published figures showing that prices have fallen for two consecutive months.

The tide has "definitely" turned against the seller in the housing market, a leading property expert said today as he published figures showing that prices have fallen for two consecutive months.

Across the country, house prices fell by 0.1 per cent, paring the average cost of a home to £152,100, a survey by Hometrack, the property website, said.

It was the second such fall in two months. Homeowners in the South bore the brunt, with house prices in Surrey and north and east London falling by 0.4 per cent. The worst hit areaswere Croydon, where prices fell almost 2 per cent, and Brighton, where they fell 1.3 per cent. Oxford and Bath were also hit, with prices falling 0.7 and 0.6 per cent respectively.

The survey adds to the growing weight of evidence that suggests soaring house price inflation has ended. Last week the National Association of Estate Agents and Rightmove, another property website, both said prices had fallen over the summer.

John Wriglesworth, Hometrack's housing economist, said the housing boom looked "well and truly over". He said: "Recent interest rate rises continue to take their toll on the housing market this month as house prices take another tumble. Home prices are now very near their peak in terms of affordability."

The second monthly fall in the number of people seeking to move house helped to drive down prices, wiping out the excess demand that contributed to the double-digit rise in house price inflation during the first half of 2004, Hometrack said. There is now "significant excess supply", it added. The number of new buyers fell 4 per cent during August. Prospective homeowners continued to knock down sellers' asking prices, with the average sales price achieved as a percentage of the asking price falling for the fourth month in a row to 94.9 per cent, down from 95.5 per cent in July. "This indicates that the tide is definitely turning against the seller, as buyers are obtaining better deals from the vendors," Mr Wriglesworth said.