Slight slowdown in property market

The number of homes changing hands dipped slightly during August as the property market suffered its traditional seasonal slowdown, Government figures showed today.

Around 83,000 properties were sold for more than £40,000 in the UK during the month, down from 87,000 in July, according to HM Revenue and Customs.

But the figure was still the second highest since June last year, and more than double the low of only 41,000 transactions reached in January.

The drop was slightly more pronounced once the figures were seasonally adjusted, with home sales dropping from 80,000 to 74,000 during August, although it was still the second highest level for 15 months on this measure.

The fall in sales during August is in line with other data on the housing market for the month, with the Council of Mortgage Lenders recently saying mortgage advances fell by 13 per cent.

The group said a drop in lending was to be expected during August when activity in the market slows down as potential buyers go away on holiday.

But it added that despite the dip, underlying lending levels appeared to have stabilised during the summer.

The National Association of Estate Agents also reported a fall in activity in the market during August, with both the number of househunters on estate agents' books and the average number of sales made per estate agent dropping during the month.

But despite the seasonal slowdown, the housing market is continuing to show signs of stabilising, with most of the major house price indexes now reporting rises.

Economists have said prices are being supported by the shortage of homes for sale, and they have warned that there could be a fresh round of price falls as more properties come on to the market due to rising unemployment.

It is also thought that continuing problems in the mortgage market will restrain any meaningful recovery in house prices, as potential buyers, particularly people taking their first step on to the property ladder, struggle to get the finance they need.