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House prices fall for first time in 2012 as slowdown reaches London market

Summary	May-12	Jun-12	Jul-12	Change
Monthly price change (%)	0.2	0.0	-0.1
% change in new buyers registering with agents	0.4	-0.5	-2.1
% change in volume of property listing	2.2	1.5	1.4
% change in sales agreed	3.8	7.3	1.5
Average time on the market (weeks)	9.3	9.4	9.5
% of the asking price being achieved	93.2	93.1	93.1
% postcode districts with price increase over month	11.6	10.8	7.2
% postcode districts with price decrease over month	12.1	23.4	31.6

Results at a glance

• House prices have fallen for the first time in seven months declining by -0.1% over July.  Notably London and the South East - areas that have supported headline price growth since the beginning of the year - are starting to slow as demand weakens and supply rises.

• The first four months of the year saw a strong rise in the number of buyers registering with agents which in turn drove prices.  But as the seasonal slowdown begins and the economy continues to weaken, so demand for housing is falling back.

• Nationally demand fell by 2.1% in July, while the South East saw the greatest decline (-3.4%). London also registered an above average fall in new buy registrations (-2.4%).

• Levels of supply continued to grow - albeit at a relatively steady pace - over the month. The number of new properties coming to the market grew by 1.4% in July and by 5.2% over the last three months. Over the same period demand fell by 2.2%.

• The gap between supply and demand (see figure 2) is set to widen over the summer months and points to further modest price galls through the summer and autumn.

• Prices fell across eight out of ten regions in July. London was the only region to register a price increase in July, up 0.1%, but the rate of growth has slowed. The number of postcodes in the capital registering price falls has started to increase although overall there are still more areas posting rises than falls in July.

• The slowdown in the South East continued over the month with prices down across 35% of postcodes - above the national average.

• Away from London and the South East prices remain under downward pressure. However there is evidence that price falls may start to slow as the proportion of asking price being achieved in Northern regions has improved over recent months.

Figure 1  "The proportion of asking price achieved remained static at 93.1% in July.  Increases would indicate some recovery of prices The time on the market increased again this month to an average of 9.5 weeks. Within this there are some major regional variations"	Time on market and % asking price achieved
Figure 2 "The balance between supply and demand leads underlying house price changes by 3 months.  The improved balance over the first half of 2011 led an improvement in the underlying rate of growth."	Supply demand balance leads price changes by 3 months
Figure 3 Figure 3 shows the proportion of postcodes registering higher and lower prices over time.  The balance of change swung into negative territory over the autumn of 2010 but the extent of price changes has slowed as supply has tightened. Prices were down across 31.6% of postcodes in July 2012."	Proportion of country registering higher and lower prices