Dip in London house prices

Experts at Rightmove, the property sales website, have reported a decrease in the asking prices for London property, for the first time in a year.

The August fall has been slight, at only 0.1%, but has to be seen in the context of a 2% average monthly rise in London house prices over the past 12 months.

The average asking price of a home in London increased by 23.4% in the year to August 2007, and currently stands at £394,268, which is £462 less than in July.

Property price movements in London are considered highly significant because in recent times, downward trends in the market have had no effect on prices in the capital.

This has been attributed in part to wealthy foreigners seeking to invest in the city and the record bonuses handed out in the financial sector.

Over 80% of all UK Estate Agents are members of Rightmove and advertise their properties on its website.

Rightmove members in England and Wales advertised 148,000 new properties during the last month, the lowest level since the beginning of the year.

It could be that the reduction in the number of new homes coming onto the market is as a result of the introduction of Home Information Packs.

These cost between £400 and £600 to prepare and that may deter homeowners putting their properties up for sale, unless they have a sincere intention to move.

According to Rightmove, the five interest rate rises since August 2006 are also having an impact on the market.

In the West Midlands and the North of England asking prices fell by 2.2% and 0.6% respectively during the month of August.

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