Supply surge drives down house prices
House prices fell for the first time in 15 months in July as supply increased, according to Hometrack.
The housing market intelligence agency reports that prices dropped -0.1 per cent across England and Wales, and is predicting further falls during the rest of the year.
The drop has been driven by a 3.6 per cent increase in the number of homes on the market, coupled with reduced confidence in the economy and fears about the impact of spending cuts.
Richard Donnell, director of research at Hometrack, said: ‘Levels of demand for housing have been slowing for the last five months - in July they fell by 1.3 per cent triggering the first monthly fall in house prices for 15 months.
‘Further modest price falls are inevitable over the second half of the year as the volume of homes for sale continues to rise and demand remains weak on the back of concerns over the wider economic outlook and uncertainty over the impact of recently announced cuts in government spending.’
He added the price rises seen during the latter part of 2009 and early 2010 were driven by ‘pent up demand’ for housing that has now mainly been satisfied.
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