August fall for house prices

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The Royal Institution of Chartered Surveyors (RICS) said house price growth had "turned negative" during the month for the first time since October 2005.

The group said demand for property was continuing to weaken as rising interest rates further hit affordability levels.

Overall, it said 1.8% more chartered surveyors in the UK reported seeing a fall in house prices during August than those who saw a rise, down from 10.8% more who reported a rise in July.

At the same time, enquiries from new buyers fell for the ninth month in a row and at their fastest pace for three years as potential buyers waited to see what impact hikes in the cost of borrowing would have on the market.

RICS said 37% more chartered surveyors reported a fall in new buyer enquiries during the month compared with those that saw a rise, compared with 27% more who reported a fall in May.

It added that enquiries fell across most regions of the country as demand faltered.

Ian Perry, RICS spokesman, said: "Potential house buyers have become far more cautious as they wait and see what affect interest rate rises will have on household finances.

"Affordability is at its most stretched in over a decade and many will worry that rising mortgage repayments will prove a step to far. The market will soften further, going into the autumn, reducing some impetus from those that have been chasing a rapidly moving target."

The number of people putting their home on the market fell for the third month in a row, as homeowners remained under little pressure to sell.