House sales stall as Britain becomes a buyers' market

Stricter lending rules that came in at the end of April, consumer caution ahead of likely interest rate rises, as well over-inflated prices, have been blamed for dampening demand.

House price growth in London is continuing to under-perform the rest of the country as buyers become more “price resistant”, following record values hikes seen in the capital in the first half of the year.

Just 11pc of London postcodes recorded month-on-month increases in property values in August, compared with 19pc of markets outside London.

Hometrack’s data also showed that 87pc of London postcode districts saw prices increase month-on-month in February, compared with 11pc this month.

The impetus for price growth now coming from the commuter belt towns in the south-east as Londoners capitalise on the high prices in the central boroughs and migrate out.

“We’ve reached the usual point where buyers go no thanks,” said Ed Mead, the managing director of estate agent, Douglas & Gordon. “Whenever this happens there’s a three-month hiatus whilst sellers readjust their sights. Asking prices had overshot and a plateau in selling prices to be expected.”

The typical time it takes to sell a London property has almost doubled since February, from just over two and-a-half weeks to nearly five weeks.

This is still around a week less than the average across England and Wales, where the time it takes to sell a home has edged up to just over six weeks.

Property prices were unchanged month-on-month in August in London, East Anglia, the North East and the North West, increased by 0.1pc in the South West, the East Midlands, Yorkshire and Humberside and the West Midlands and rose by 0.2pc in the South East.

The strongest month-on-month growth was seen in Wales, where prices recorded a 0.5pc increase.

Hometrack’s new data followed a forecast released earlier this week by property group, Savills, which predicted a slowdown in London house price growth but a pick up in property values in the Midlands and the North later this year.

This was echoed by the London estate agents, Foxtons, on Wednesday.

At its half year results the management also warned of a cool down in the capital.

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