Statistics from Hometrack show that the London property market has faltered, with a drop of a fall of -0.1%.

The number of housing transactions in the capital has increased at a slower rate during May, with a 7.8% increase in the number of sales agreed compared with 11.3% in April’s survey. However, supply continues to exceed demand and the gap between the two is growing.

The discounts buyers are achieving on asking price have dropped to below 7% for the first time since September 2004, with the average sales price as a percentage of asking price increasing to 93.2% (92.9% in April?s survey).

Despite there being more properties on the market, the time they are taking to sell has increased to 5.9 weeks (5.8 weeks in April?s survey), however the average number of viewings has remained at 15.1 per sale.

The number of new buyers coming on to the market increasing at a comparatively slower rate than the number of properties for sale helps to explain why properties are taking longer to shift.

Out of all the London boroughs, 16 have seen price rises or remained static and 17 have seen price falls. The best performing boroughs are Haringey (0.6%), Kensington & Chelsea (0.6%), Islington (0.3%), City of London (0.2%) and Hackney (0.1%). The worst performing boroughs include Brent (-1.4%), Hounslow (-1%), Camden (-0.9%), Barking & Dagenham (-0.6%) and Redbridge (-0.5%).

John Wriglesworth, Hometrack?s housing economist, comments: “Last month?s positive house price inflation has been wiped out by further falls across the capital this month, taking us back to the same average property values we saw in March. With each step forward we take in terms of house prices we seem to be taking one step back, leaving us with a flat property market with no imminent signs of a full recovery.

The distribution of price rises and falls varies across the capital. The South East and the City have seen minimal increases, while the North West and the West have been hit hard by price falls.

However, with the possibility of lowering interest rates and rising incomes, there are no fundamental reasons why the market shouldn?t recover in the longer term.

We have readjusted our forecast for 2005 to -5%.”
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