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House prices drop for first time in a year

By Dominic Welling dominic.welling@consumerchoices.co.uk

House prices have started to fall for the first time since July 2009, according to the Royal Institution of Chartered Surveyors (RICS).

There are signs of a downturn after the number of properties on the market continued to increase but the number of buyers shrunk, the survey reported.

Demand for property fell for the second month in a row due to continued lack of mortgage lending and an increased caution among potential buyers.

Meanwhile the rise in the number of properties up for sale was fuelled by the abolition of home information packs (HIPs) and homeowners being more willing to test the market.

The only areas which continued to see price growth in July were London and the North West.

RICS members also expect the downward pressure on house prices to continue.

Ian Perry, a spokesman for the professional body, said: "Significantly, the forward looking price expectations numbers suggest that this softer trend will continue through the second half of the year.

“However, agents are still generally optimistic about sales activity which should benefit from more realistic pricing of properties."