House prices in England and Wales fell very slightly in August, according to the Land Registry.

Prices dropped by just 0.1%, or £202, from July to take the average home price to £155,968.

That was 9.4% lower than in August 2008, a continued slowdown in the rate at which prices have fallen.

"The annual rate of decline is continuing to slow... from a low of approximately -16% experienced in February," the Land Registry said.

New trend?

The Registry's figures add weight to recent suggestions that this year's revival in both prices and sales may be running out of steam, at least over the summer.

Last week, HM Revenue & Customs reported that there had been a small drop in the number of property sales in August across the UK.

And the Council of Mortgage Lenders reported a drop in the amount of mortgage lending last month compared with July.

Meanwhile, the number of new mortgages approved but not yet lent by members of the British Bankers' Association also dipped in August.

One month's figures do not necessarily indicate a changed trend, and August's numbers may have been heavily influenced by the summer holidays.

One large estate agency group, Knight Frank, said that the price of "prime" country homes was now going up.

The average price of a farm house, manor house or cottages rose by 0.8% in the three months to September, compared to a fall of 0.9% in the previous quarter, it reported.

"A surge in demand and a shortage of quality property on the market is the principal reason prices are increasing," said Andrew Shirley of Knight Frank.

"The big question now is how much pent-up demand from frustrated potential buyers remains in the system to maintain the momentum," he added.

London

The Land Registry said prices in the capital rose by 0.8% in August, the fourth monthly increase in a row.

"This brings the average property price in the capital to £310,640," its report said.

Prices in London are now only 6% lower than they were a year ago, but in other parts of England the decline over the past year has been steeper.

In the north-west of England prices are nearly 13% lower than a year ago, while in the East Midlands they are down by 10%.

Prices have fallen fastest in Hartlepool, where they have gone down by 24% in the past 12 months.

David Smith of property firm Carter Jonas said overall the Land Registry's figures were encouraging.

"The property market is surprisingly buoyant at present and sellers are achieving some attractive prices," he said.

"Just how long this will last, though, is by no means certain."

Source: BBC

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