FTAdviser.com

Advertising

The fall in June adds to recent reductions, causing house prices fall by 2.5 per cent overall over the first half of 2008.

Meanwhile, on a year-on-year basis the annual rate of growth fell to -3.2 per cent, the latest national housing market survey from Hometrack found. This is the lowest level since September 2005, when the annual rate hit -3.5 per cent.

Richard Donnell, Hometrack’s director of research, said: "New buyer registrations were down 5.7 per cent in June and have now fallen by 52 per cent since the start of the credit crunch.

"This drop in volumes was always possible as around half of all transactions in recent years have been driven by aspirational or non needs based movers who are now sitting on their hands. The net result is a sizable drop in transaction volumes which look set to reach levels not seen since the 1970s."

Hometrack attributed the falls to falling levels of demand and a continued growth in the supply of homes for sale undermining values, despite the number of properties coming to the market over June being down on previous months.

The supply of homes for sale on agents’ books grew by 1.4 per cent over June compared to an average monthly increase of 5 per cent over the last four months.

Meanwhile, the increasing downward pressure on prices caused the proportion of the asking price being achieved slip from 92.3 per cent in May to 91.6 per cent in June. This is the lowest level since the survey began in 2001.

It is also taking longer to sell property, with the average time span now standing at 10.3 weeks, up from six weeks in June 2007.