Property prices stall

House prices have completely stalled in almost a quarter of London's boroughs as jitters about the state of the property market heighten.

They show that prices have remained frozen in seven boroughs in the past month, and that the average increase London-wide is only 0.4 per cent. Average house prices remain at just above £250,000.

Another sign of a weakening market is that only 95 per cent of sellers are achieving their asking price - meaning they are are prepared to accept lower offers than they were hoping for.

As a result of the figures, house price monitor Hometrack says it is substantially revising its 2004 forecasts from an increase of 10 per cent to seven per cent. However, it was confident there would not be a dramatic price crash.

Hometrack economist John Wriglesworth said: "The London market has recovered from the slump it experienced in 2003 and prices have topped the previous highest levels recorded in October

2002.

" However, there are inescapable signs that the market is slowing down.

"The full effect of recent interest rate rises has yet to filter through and we predict

that they will contribute to a further house-price slowdown in the capital."

Mr Wriglesworth added: "But we maintain our view that speculation of an imminent house price crash has no foundation. Hometrack predicts that the market will level."

Experts say there have been two key factors in the slowdown.

Earlier this month, Mervyn King - the governor of the Bank of England - publicly warned prospective house buyers to be cautious.

He said there was the likeli-hood of further increases in interest rates and a slump in prices.

And the recent increases in interest rates themselves - by one per cent in the past eight months - have deterred many people from joining the housing ladder.

Today's figures show that:

  • In June, prices rose by more than one per cent in only four boroughs: Hackney (two per cent), Kensington & Chelsea (1.3 per cent), Newham (1.2 per cent) and Sutton (1.1 per cent).
  • In 24 boroughs, prices went up 0.5 per cent or less in June.

13.9 per cent - followed by 11.6 in Redbridge.

  • Elsewhere, annual price rises were in single figures.
  • In 15 boroughs the annual price rise was below five per cent.
  • Homes are still selling quickly - in just under four weeks.
  • The average number of viewings per sale remains at about 12.

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