The average asking price for a UK home fell 2.2% this month, according to property website Rightmove. The average house price fell by £5,102 to £222,762- compared to a 0.6% rise in the previous month.

According to the property website, on an annual basis, house prices have now dropped by 3.1% this year.

Miles Shipside, commercial director of Rightmove comments: “After several months of activity and prices revving upwards from last winter’s low point, both will start to hit the limiter without more mortgage finance. In spite of pent up demand, the market and pricing is boxed in by restrictive lending criteria put in place to ration mortgages given the lack of funds available to lenders”.

Rightmove believe that future price and transaction growth is now controlled by the bottleneck of mortgage availability. Miles Shipside goes on to say “Lenders are looking to remove as much risk as possible from their mortgage book. While the government’s left-hand is waving them on to lend to more home movers and small businesses, the right-hand is effectively flagging them down again by urging lenders to re-build balance sheets and improve capital adequacy”.

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