Housing prices slip back while demand rises again

Estate agent figures published today reveal that house prices have continued to edge back in July, although there was some brighter news as the number of agreed sales rose sharply for the second-consecutive month.

According to the latest National Housing Survey from Hometrack, average house prices dropped by 0.1 per cent for the third straight month, resulting in a 3.9 per cent fall from July 2010. However, sales volumes increased 9.6 per cent, having jumped by 10.7 per cent in June.

"The improvement in demand over the last six months has come as something of a surprise but this in part is down to pent-up demand slowly feeding back into the market," said Richard Donnell, director of research at Hometrack.

"Four years into the downturn and there will be a growing volume of buyers looking to move."

Mr Donnell put the sales jump down to sellers and buyers becoming "more accepting of realistic pricing", pointing to the fact that more than 90 per cent of the time the asking price was achieved. He also said the rise in sales meant there was unlikely to be any major moves in house prices, although he did say he expected them to continue to ease back in the near-future.

There was a wide variation across the country with average prices in London and East Anglia climbing 0.3 per cent. However, these were the only regions to see a positive trend with the biggest fall experienced in the South West where there was a drop of 0.6 per cent.

In other data out today, research from Lloyds TSB said house prices in East London have risen by an average of £192 a week since the Olympic Games was awarded to the area.