The asking price of homes in the UK has fallen for the first time this year, adding to the sense that the property market is cooling.
Between June and July the price of homes put up for sale fell by 0.8 per cent nationwide, and by almost 2 per cent in parts of the Midlands and the north of England.
Experts blame the impact of tougher tests for mortgage applications, making it harder to get loans, as well as the World Cup and summer holidays distracting buyers from splashing out on a new home.
Average asking prices fell by 0.8 per cent between June and July, according to property website Rightmove
Banks have been told to carry out more intense checks on people applying for mortgages, including their ability to cope with a rise in interest rates.
Making it more difficult to get a loan has reduced the number of potential buyers, forcing sellers to consider cutting their asking price.
The latest house price index from property website Rightmove shows asking prices are down 0.8 per cent, or £2,116.
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It is the first time the figure has fallen since the end of 2013.
Miles Shipside, Rightmove director, said: ‘A price fall in July is not unexpected as prospective buyers turn their attention to the summer holidays, not to mention the added distraction of an engaging World Cup.
‘Buyer confidence may also have taken a knock with suggestions that mortgages are becoming harder to get and repayments may get more costly sooner than originally anticipated should the rumours of an interest rate rise before the next election come true.’
The report shows that in July asking prices for every type of home fell, including detached homes down 0.6 per cent, semi-detached 1 per cent, terraced properties were 2.8 per cent lower and flats and apartments fell 0.9 per cent.
Despite the drop in July so far, Rightmove raised its forecast for annual house price growth in 2014.
The firm forecasts annual prices will lift 8 per cent this year, boosted by Help to Buy for first-time buyers, more affluent third-time buyers in the market and faster selling times.
Rightmove estimates house prices will continue to rise despite measures introduced by the Bank of England last month to curb prices such as new caps on high loan-to-income value loans and stronger affordability ‘stress tests’ for borrowers.
Last week the Office for National Statistics said house prices in London had risen at a record annual rate of 20.1 per cent while they were up 10.5 per cent across the UK.
Rightmove said the Government’s Help to Buy scheme had not only encouraged first-time buyers, but had freed up the market for richer third-time buyers who could afford larger properties.
Mr Shipside said: ‘The unleashing of this more affluent group, plus good supporting acts from first-time and second-time buyers, will mean that the musical chairs of trading up and down will continue in the second half of the year having been kick-started by Help to Buy in the first half.’
The group also said that speeding up of housing completions, down 10 days year-on-year to 65 days had brought more sellers into the market.
The housing website also added that the London ripple effect, which pushes up the prices of properties around the capital, continued unabated because of the shortage of suitable housing stock.
The firm added it was seeing the beginnings of the same London ripple effect around large northern cities such as Manchester, Leeds, York and Liverpool.