House prices in England and Wales dipped in July, the first price decline in 15 months. The property data company Hometrack said its latest survey provided further evidence that the housing recovery is running out of steam.
Prices fell 0.1% this month as demand eased, supply rose and homes took longer to sell - the average time now approaching 9 weeks.
Hometrack said that fears about public spending cuts had dented confidence, leading to 1.3% fewer new buyers registering with estate agents.
Director of research, Richard Donnell, said the monthly drop marked a turning point for the housing market, and warned more falls were likely.
"Further modest house price falls are inevitable over the second half of the year as the volume of homes for sale continues to rise and demand remains weak," he said.
"It is hard to identify factors that will drive any marked increase in demand for housing in the coming months."
Hometrack has consistently shown smaller price falls and rises than surveys by mortgage lenders Halifax and Nationwide and actual price changes recorded in official government Land Registry data.
