House prices in England and Wales fell for the first time in 15 months in July, causing the annual rate to weaken for the first time in over a year, according to property data company Hometrack.
It said talk of public spending cuts had taken its toll on confidence, leading to 1.3 per cent fewer new buyers registering with estate agents. The number of houses being put up for sale continued to rise, however.
Hometrack's director of research, Richard Donnell, said the monthly drop marked a turning point for the housing market, and warned more falls were likely.
"Further modest house 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," he said.
"It is hard to identify factors that will drive any marked increase in demand for housing in the coming months."
Hometrack's survey of estate agents and surveyors showed an average fall of 0.1 per cent in house prices in July, the first fall since April 2009. That pushed the year-on-year rate down to 2.0 per cent from 2.1 per cent in June, the first time that measure has slipped since March 2009.
Hometrack has consistently shown smaller price falls and rises than surveys by mortgage lenders Halifax and Nationwide and actual price changes recorded in official government Land Registry data.
However, the thrust of the data chimes with other indicators which suggest a year-long recovery in house prices has started to run out of steam.
Reuters