UK house price inflation falls further

aAsking prices for properties in England nudged up by 0.2 per cent between mid-May and mid-June, but annual gains dipped to 2.4 per cent from 4.9 per cent as homes for sale pile up in estate agents' books, said a survey yesterday.

According to the Rightmove report, the annual increase rate is the lowest since the start of the survey in 2001 and will hit zero within the next two months with buyers unable or unwilling to pay ever increasing prices. "Having had it so good for many years, it's now payback time for the property market," said Miles Shipside, Rightmove's commercial director, adding that wages have failed to keep up with house price inflation over the last years.

"As many sellers are refusing to part with gains they have made, buyers are forced to make up the affordability gap.

Meanwhile, the number of properties available to buyers rose to a new peak of 73 from 70 per estate agent, up for the second successive month and the highest since 2001.

Especially first time buyers, key to the long term health of the property market, have reached the thin end of their affordability gap, says Rightmove. Relying solely on current wage rise levels, it would take seven years for them to be in a position to step on the property ladder.

The average home was up for sale at an asking price of £198,642.