House price falls 'accelerating'

Prices have fallen in London for the first time in eight years

The fall in house prices has accelerated in England and Wales, according to the Land Registry.

Its latest report shows that prices fell by 1.9% in August, taking the annual rate of price deflation to 4.6%.

The figures mean that the average property now costs £174,493; £8,320 less than a year ago, with £3,871 of that drop occurring last month.

Prices in London fell by 3.2%, the first monthly fall since the Registry started publishing its figures in 2000.

Two months ago the Land Registry was suggesting that prices across England and Wales were, on average, still 0.1% higher than a year ago.

But with prices falling sharply in August, its monthly survey is starting to catch up fast with the surveys of lenders such as the Halifax and the Nationwide who have both reported that prices are down by 11% in the past year.

"Today's data from the Land Registry confirmed that house price falls are gathering momentum," said Seema Shah at Capital Economics.

"With transactions less than half of their level a year ago, coupled with the fact that the outlook for the economy is steadily deteriorating, the speed of this housing market correction still has the potential to step up a gear."

Falling sales

Both the monthly and annual falls recorded in August were the biggest so far seen by the Land Registry, whose figures are based on prices actually paid at completion of the sale.

All regions now have prices that are lower than they were a year ago, with the biggest fall being 6.7% for the East of England and the smallest drop that of 2.5% in North West England.

Looking at smaller areas, prices have fallen fastest in Denbighshire, down by 6.7%, but have risen by 4.8% in Hartlepool, the biggest annual rise of any county or local authority area.

As well as prices, transactions have been falling sharply too.

In June, the last month for which the Registry has complete data, sales were 56% lower than the year before at just over 54,000.