House prices fall to a 21 month low

LSL Property Services have reported that house prices have fallen a further 3% in the second quarter of 2011, bringing the average house price on the Acadametrics index down to £217,300, the lowest since December 2009. The gains seen throughout 2010 have been wiped out, although prices remain higher than the £200,000 low point reached in April 2009.

David Newnes, director of LSL Property Services, said,

"The fact that prices have only fallen by 0.1% means the steep declines between April and June have ceased. Transactions met their expected seasonal rise of 5% in July. This indicates that the market is not falling off a cliff in the short term, but that it remains weak in the longer term.
Of all types of property, flats have shown the weakest growth in transactions. This indicates that the first-time buyers who would normally be driving the market for smaller properties remain excluded from the market."

The report follows a similar one by the Royal Institution of Chartered Surveyors who said that house transactions are at a two year low, with estate agents selling only 14.2 properties on average over a three month period.