House prices slip – but mortgages are most affordable in 15 years

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National house prices have fallen for the second month in a row in August, pushed down by a static London market that had previously been on the up in 2012.

Hometrack's monthly house price index, published today, offers a gloomy outlook for property prices, with predictions of further downward pressure on prices in the months ahead.

The average national home price slipped 0.1 per cent in August – the same as July – with demand across the country having fallen for the past three months, according to the canvass of 1,500 agents and surveyors.

"The market remains in a shallow state," said Richard Donnell, Hometrack's director of research. "Thin volumes and a sluggish market, compounded by seasonal and one-off events, is reflected in volatility. As the supply-demand balance weakens, I expect to see slow downward pressure on prices over the remainder of the year."

For borrowers there is brighter news, as Halifax research today reveals that mortgage payments are at their lowest level as a proportion of disposable earnings for 15 years. Typical mortgage payments for new borrowers – both first-time buyers and home-movers – at the long-term average loan-to-value ratio stood at 26 per cent of disposable earnings in the second quarter of 2012 after peaking at 48 per cent in the third quarter of 2007.