Property prices fall to lowest level in 19 months
New data shows that London continues to outperform other regions in the UK, with prices rising by 5.6 per cent in the last four years while other regions continue to see falls.
UK property prices have reached their lowest level since December 2009, following a three per cent drop in the three months to the end of June, data from LSL Property Services, has shown.
The average property price in July was £217,300, recording a slight monthly decrease of 0.1 per cent compared to June and an annual fall of 2.6 per cent.
Across all UK regions, only London has seen consistent price growth in the last four years. According to LSL, property prices in the Capital have risen by 5.6 per cent over this period.
However, LSL did say that this represented a fall of 7.5 per cent "in real terms".
David Brown, commercial director of LSL Property Services, claimed that as UK prices only fell by 0.1 per cent in the month, the steep declines seen between April and June have ceased.
He claimed that transactions met their "expected seasonal rise" of five per cent in July, indicating that the market is not "falling off a cliff" in the short-term, but that it remains weak in the longer term.
However, property transactions were down 5.9 per cent in the second quarter of this year compared to the same period in 2010, with LSL stating that cheap mortgage deals "failed to stimulate growth".
Mr Brown said: "This is primarily a result of the continuing restriction on demand from tight mortgage lending criteria. Lenders worried about the economic picture in the UK and beyond are reluctant to return to high-volume lending at high loan-to-values (LTVs).
"But this hasn't stopped lenders taking advantage of low interest rates to compete for market share of borrowers who are considered a safe bet."
He highlighted that below 70 per cent LTV, there were now five-year fixed-rate deals below 3.4 per cent and for many buyers stagnant prices and increasingly affordable mortgages make for "great opportunities to lock into deals at an unprecedentedly low cost".
Mr Brown said: "Those able to convince lenders they are a low-risk borrower are taking their chance to get onto the market at a favourable time and this has driven transactions for larger properties.
"The 22 per cent growth in mortgage lending for house purchase announced this week by the Council of Mortgage Lenders (CML) is testament to this.
"Of all types of property, flats have shown the weakest growth in transactions. This indicates that the first-time buyers who would normally be driving the market for smaller properties remain excluded from the market."