Transaction levels fall as prices keep wobbling

01 2008
House prices in London slumped for a third consecutive time last month, supporting the view that renting remains the best option for those thinking about taking a step onto the property ladder.

According to new statistics published by Knight Frank, the cost of an average home in the heart of the capital fell by 1.6 per cent in July.

This comes after declines of 1.7 per cent and 1.5 per cent, seen in June and May respectively and is likely to lead to a growing number of would-be buyers choosing to stay out of the market until the rot stops – a view supported by the fact that the study also found that the number of property transactions have also fallen by 50 per cent in comparison to last year.

"The situation is unlikely to change until the mortgage market eases and the economic outlook improves," explained Liam Bailey, head of residential research at Knight Frank.

"Therefore, further price falls are probable - confined to single figures if the market begins to ease, but potentially more significant if the global outlook deteriorates." he added.

Only the prime property sector – that is homes costing over £2 million – remains strong, it was also revealed.
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