Home prices in the UK declined for the first time this year in July as the deepening recession and Eurozone debt worries curbed demand for properties, a survey by Hometrack revealed Monday.
House prices slipped 0.1 percent month-on-month in July. Demand fell 2.1 percent during the month, the survey revealed. At the same time, the number of properties coming to the market was 1.4 percent higher than a month earlier.
London was the only region to report an increase in house prices, though the rate of inflation eased to 0.1 percent. Further, data showed that the number of new buyers fell 2.4 percent in the capital.
Richard Donnell, director of research at Hometrack, said, "Weaker demand is to be expected over the summer months, but compared to previous years, the seasonal slowdown has started earlier and developed more rapidly."
"This reflects growing concern over the U.K.'s economy and the deepening euro-zone crisis," he added.
Going forward, the gap between supply and demand is expected to widen further, meaning prices are likely to fall again in the coming months into autumn, Donnell said.
Official data last week showed that the economy contracted 0.7 percent in the second quarter, the most in more than three years.
In a speech last week, Chancellor George Osborne said that the GDP figures were "disappointing" and the government will work even harder to attract more investment.
by RTT Staff Writer
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