Housing transactions fall back in August

Nia Williams

September 10, 2010

Its latest house price index shows that average house prices registered a 0.2% increase in August but have remained largely static over the last five months.

Year on year house price growth slowed to 7.7%, and is expected to slow further as 2010 increases are failing to match those of a year ago.

Commenting, David Brown, commercial director of LSL Property Services said: “The pickup in house sales since the start of the year dropped off in August. The exception is London where high demand for prized property from cash-rich buyers has seen housing market activity increase.

“Some buyers will be wary of imminent public sector cuts and the knock-on consequences for the economy.

“In the short term we expect small fluctuations but no significant dip in the wider market.

“Regional differences may be quite stark as some areas of the country feel the effect of cuts more than others. Active first-time buyers are the key to a healthy housing market and most are waiting for more attractive products from lenders before they make a move.

“Lending has been broadly flat and house price growth has slowed, with neither likely to pick up again until positive economic news helps to ease lending conditions. Lenders and the government must perform a financial balancing act to ensure supply does not begin to pull away from demand.”

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