Stagnant or growing House price figures clash

House prices are almost static as the slowdown gathers pace according to Hometrack - but this is hotly disputed by the Nationwide today.

The Hometrack consultancy, which produces its monthly house price index based on data from 5,000 agents in 2,300 postcodes across England and Wales, says prices rose just 0.1 per cent for the second month.

A key characteristic of the past month is the rapid narrowing of the gap between supply and demand.

The market in London continues to under-perform the rest of England and Wales, it says.

Growth in the capital flat-lined once again in August and just 11 per cent of London postcodes registered month on month price increases. This compares to prices rising across 19 per cent of markets outside London.

Hometrack says the change of fortunes for the London market over the last six months has been stark. In February this year 87 per cent of London postcodes witnessed a price increase over the month compared to just 11 per cent now. The proportion of the asking price achieved has fallen from 98.8 to 96.4 per cent.

Meanwhile across all of England and Wales, key indicators show a stagnating market.

The average time a home is on the market is now 6.3 weeks - just three months ago it was 5.9 per cent. Even in August - a time that is traditionally quiet for new instructions - there was a 0.1 per cent increase in the volume of property listings. More than one in 25 postcodes are now showing average price falls whereas three months ago it was one in 60.

The signs of a slowdown were starting to emerge back. Talk of a housing bubble and warning from the Bank of England have impacted sentiment while tougher affordability checks for mortgages and rumblings around interest rate rises is starting to make buyers think twice says Hometrack research director Richard Donnell.

Important lead indicators are pointing to a loss of momentum, in particular a widening gap between asking and achieved prices in the face of weaker demand and an increase in the time on the market. We expect a continued shift towards a seller's market in the face of weaker, more price sensitive demand he says.

But rival figures from Nationwide show that house prices moved up by an average of 0.8 per cent in August - the 16th successive monthly rise.

As a result, house price growth annually is still rising substantially - it's not 11 per cent a year, up from 10.6 per cent a month ago.

Nationwide's figures come from mortgage data, and while these rises are large, Nationwide insists they are not unsustainable.

"National housing affordability does not appear stretched by historic standards, in part due to the low level of mortgage rates" claims Nationwide chief economist Robert Gardner.