Home prices in London fell for the second consecutive month in July as a result of the government's efforts to curb the over-heating property market of Britain's capital.
According to a latest real estate report by Rightmove Plc., a famous property intelligence firm, asking prices for existing homes fell 0.4 percent in June to $1 million after the number of homes being offered for sale increased relieving the pent-up demand.
The total number of homes offered for sale in July was 15 percent on a year-over-year basis.
Earlier, it was reported that home prices in Britain's capital reportedly dropped to 31 points, the lowest since March 2013 after the Bank of England tightened lending rules in the city. At that time, experts forecast the prices to go down in the coming months as well.
True to the predictions, home prices have gone down across U.K. According to the Rightmove report, home prices decreased 0.8 percent in July - the first time prices went down since December 2013.
Prices went down in all areas except for the West Midlands, East midlands, East Anglia and North West. Even in these areas, the pace of increase had slowed to 6.5 percent on a year-on-year basis when compared to the 7.7 percent increase in June.
The price-falls are a result of the strict property curbs that the Bank of England had introduced. Over the last few months, lending has been tightened with mortgages being granted only on the basis of income and value of property.
"Buyer confidence may also have taken a knock with suggestions that mortgages are becoming harder to get, and repayments may get more costly sooner than originally anticipated, should the rumors of an interest rate rise before the next election come true," Miles Shipstone, analyst at Rightmove, was quoted by The Telegraph.
However, the Rightmove report also underscores that some government programs like the "Help to Buy" scheme could bolster home prices in the next half of the year by 8 percent.
"We forecast a slower-paced second half of 2014. But with bigger-deposit, third-time movers entering the fray and lenders still having lending targets to meet, there is still enough momentum to see an 8pc national average increase in new seller asking prices," Shipstone added.
