Page last updated at 10:56 GMT, Tuesday, 22 September 2009 11:56 UK

House sales 'stalled in August'

Houses in Brighton
The property market has undergone a revival so far this year

UK house sales fell in August from July, the first drop this year, according to HM Revenue & Customs.

Figures from HMRC show that 83,000 homes were sold last month, down from 87,000 in July.

House sales had been rising steadily this year, with the property market reviving from the sudden slump triggered by the credit crunch in 2007.

However, sales in August were still double the number sold in January, and 19% higher than in August last year.

The figures chime with those from the Council of Mortgage Lenders (CML) , which last week reported that total mortgage lending, both for house buyers and people re-mortgaging, dropped by 13% in August from July.

The CML attributed this to the effect of the summer holidays but said lending would probably be subdued in the next few months.

Some commentators have predicted that the revival of sales and house prices this year would soon run out of steam.

Parental cash

There has been some evidence that much of the new house buying, particularly by first-time buyers, has been financed substantially by loans from parents who have been providing money for their children's mortgage deposits.

A recent survey from the property website of more than 4,000 users showed that nearly half of first-time buyers received financial help from their families to buy a home.

Lenders typically require a down payment of 25% of a property's value before granting a first-time loan.

Earlier this month the economic forecasters at the Ernst & Young Item Club said this source of money had artificially stimulated the property market this year and would soon run out, leading to a renewed fall in house prices next year.

However the best indicator of near-term trends in sales comes from the Bank of England which publishes figures each month on the number of new mortgages approved for house purchase but not yet lent.

Its most recent data shows that mortgage approvals, which have been rising steadily since their low point last November, went up again in July to just over 50,000.

Though a minority of sales go through without the buyer taking out a mortgage, the mortgage approvals figures suggest that overall sales are not likely to fall significantly in the near future.

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