House sales show August dip

Figures from HM Revenue & Customs show UK house sales falling back slightly in August, with volumes registering their first decline for a year.

Transactions for properties worth over £40,000 stood at 83,000 for the month, compared with 87,000 in July.

However, the August figure was 19% up on a year earlier and more than double January’s low of 41,000.

While the dip is easily attributed to seasonal trends, some market commentators are pessimistic about the months ahead.

Last week, Ernst & Young Item Club called the price rises seen in recent months a “false dawn” and predicted that the average value of a UK home will not revisit to its 2007 peak for at least another five years.

The economic forecasting group also warned that prices will drop again in 2010 on the back of rising unemployment and restricted access to mortgage finance.

A similar view is held by Jones Lang LaSalle, the real estate and investment management firm.

It sees the current rally as irrational and is forecasting a W-shaped recovery of the market with prices dropping by around 7% in 2010, and only begin a sustained recovery in 2012.

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