House prices down again in August

Buyers are now seeking a reduction on the initial asking price

House prices fell again in August, with the interest rate cut at the start of the month appearing to do little to revive the marketplace, figures show.

The average cost of a property in England and Wales fell by 0.1% in August, according to property website Hometrack. Prices fell by 0.2% in July.

It is the 14th month in succession that property prices have gone down.

Hometrack says prices have now fallen by 3.7% over the last year. Interest rates were lowered to 4.5% on 4 August.

The Bank of England reduced the base rate by one quarter of a percent, the first change since August last year.

The average cost of a property in England and Wales is now £161,000, almost £7,000 less than in June 2004.

Buyers' market

"House prices have failed to respond to the recent interest rate cut and continue their stagnating negative trend, which has now gone on for well over a year," said Hometrack's housing economist John Wriglesworth.

"While transactions have picked up a little this month, a further reduction in new buyers and a further increase in supply suggests no prospect of price rises in the near future."

Mr Wriglesworth added that buyers were now generally seeking discounts of more than 6% of a property's asking price.

Only three areas across England and Wales saw prices increase during August - Leicestershire (by 0.8%), east London (0.1%) and the West Midlands (also 0.1%).

Prices remained level in 21 counties and fell in 33, with Avon seeing the biggest decline - down 0.6%.

It was followed by Buckinghamshire, Bedfordshire, West Sussex and Surrey.