Olympics blamed in house price fall

House prices have fallen for the third month in a row after a poor summer for the property market as buyers stayed home to watch the Olympics, according to new research.

The average asking price for a property fell 0.6% between August and September to £234,858 in England and Wales, Rightmove said. The fall follows declines in July and August, when prices fell 1.7% and 2.4% month-on-month respectively.

Rightmove's latest house price index showed properties coming to market are now £11,000 cheaper than they were three months ago.

Miles Shipside, housing market analyst at Rightmove, said: "Summer sellers have had some very stiff competition, not only from competing sellers chopping their prices, but also from the Olympics extravaganza which has been more compelling for many than viewing property."

Prices rose marginally year-on-year in September, up 0.7%, but are almost unchanged compared with five years ago as the housing market has ground to a halt.

Mr Shipside said: "The state of the housing market is little different now to this time last year and prices have stagnated as neither buyers nor sellers have been forced to change their behaviours in sufficient quantities to stimulate greater activity."

He added: "The global squeeze in the credit markets has seriously affected the man on the street's access to mortgage financing, permanently hampering their ability to finance their journey onto and up the housing ladder."

Hefty deposits now required by lenders are putting a house purchase out of reach for many first time buyers, with the average loan-to-value now at around 25%. This is preventing many from getting on the housing ladder, despite better affordability.

Figures from Halifax recently revealed that it is now more affordable on a monthly basis to own a home than to rent, costing 18% - or £132 - less on average thanks to lower mortgage rates and property price falls.

The data from Rightmove shows that prices fell month-on-month in most regions, except London and East Anglia, which saw a 0.3% rise to £456,237 and 4.3% increase to £229,231 respectively. The North saw the steepest fall, down 2.3% to £144,795, followed by the North West with a 2% drop to £159,729 and the South West with a 1.3% decline to £256,456.