More evidence of falling house prices

House prices fell in July for the first time since February, according to a survey by the Nationwide building society.

Its figures showed the average price of a UK property dropped from £170,111 to £169,347 last month, a reduction of 0.5 percent.

This monthly fall means the annual rate of house price inflation dropped to 6.6 percent in July from 8.7 percent in June, Nationwide said.

Demand from homebuyers in 2010 remains subdued and has made little progress in building upon the recovery seen during much of 2009.

Furthermore, the number of properties changing hands in the UK is only at half the rate seen prior to the recession, despite the introduction of second stamp duty holiday for the vast majority of first time buyers and record low interest rates, it said.

And unfortunately for those people earning only a modest income, restrictive credit conditions coupled with the bleak economic outlook has left only wealthier buyers in the market, with many first time buyers lacking the confidence to purchase as uncertainty over employment prospects remain.

Meanwhile, IHS Global Insight said the figures support their view that prices will fall between three and five percent during the second half of 2010.