House prices in the UK fell by their biggest margin for 16 months in August, according to new figures from property data group Hometrack.
The company’s latest monthly survey of estate agents and surveyors revealed that the average cost of home dropped by 0.3 per cent during the month – the biggest monthly fall since April 2009 – to £158,300.
Hometrack said the decline was driven by a 2.2 per cent drop in demand for housing and an increase in the availability of homes for sale, with estate agents reporting a 2.4 per cent rise in the number of new properties on the market.
According to the company, house prices are just 1.5 per cent higher than they were 12 months ago, the smallest annual gain since March.
Richard Donnell, director of research at Hometrack, said: "The housing market is in the process of a modest re-pricing that is likely to run for the next 6 to 12 months."
"The unmistakable fact is that the availability of homes for sale has improved markedly and this has reduced the support for house prices provided by the scarcity of housing for sale over 2009 and early 2010."
"This comes at a time when there is growing weakness on the demand side - a weakness which represents more than just a seasonal blip."
He added: "We expect further modest price falls in the coming months."
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