According to the Financial Times House Price Index (FTHPI), nominal house prices in England and Wales dropped for the fifth consecutive month in July by a further -0.5% following June’s figure of -0.6%, meaning the average house price in July was £226,292.

However, the Acadametrics-conducted index found that despite the fall in July, annual growth still remained positive at +0.3%. July was the 11 th successive month in which annual capital growth rate has declined and it is now at its lowest level since February 1996.

The research pointed to the increasing difference between transactions-based indices such as the FTHPI and those based on mortgage offers such as the Nationwide House Price Index. Although all of the indices reported declining house prices, those based on mortgage offers found that property values dropped at a quicker rate. Academetrics believes that this is having a negative impact on consumer confidence and that the continuing slide therefore becomes a ‘self fulfilling prophecy’.

Troy Martin, director at Acadametrics, told PIN: “Indices based on mortgage offers are always based on the lenders own sample. They are much more volatile as they are directly linked to the level of finance currently available. The FTHPI looks at all transactions including those paid for in cash which do not have to rely on the finance sector. The housing market is based on confidence, as people read headlines of falling house prices they believe the worst and so prices continue to spiral down.”