House prices fall for the first time in 2012

The prices for UK property have fallen for the first time in 2012, according to a newly released report. Said the research, it is the fact that the economic slowdown has reached London which has seen overall property prices affected.

According to the new figures released by Hometrack, demand has fallen and supply has increased in London and the South East. This has seen the two best performing regions in terms of properties for sale start to see a slowdown in terms of the prices that they can attract.

This meant that the cost of a house on average in the UK fell by 0.1 per cent in July when compared to just one month earlier.

This comes in the same week as the Land Registry has reported that the value of homes showed a good level of rise in June, especially in the south-east.

However, Hometrack said that the problem was a lack of demand for homes in July. It found that in the south-east alone, there was a 3.4 per cent reduction in the level of demand for new house purchases. This played a large part in the national decline of 2.1 per cent.

Richard Donnell, director of research at Hometrack, said: "House prices are particularly sensitive to changes in levels of demand and during the first four months of the year there was a strong rise in the number of buyers registering with agents - especially in Southern England - and with this came price rises.  Now, however, demand is starting to falter across the board. The seasonal downturn has begun and this combined with a weakening economy is impacting on demand for housing. "

He went on to add that a drop in the number of people who are looking to buy is normal in the summer, so it is not unexpected. However, Mr Donnell added that this year's decline has come earlier, and has been far more rapid than in recent years.