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House prices fall in August 2017
Home values edged down by 0.1 per cent, taking price growth to just 2.1 per cent, as measured by Nationwide.
The average house price in Britain is now at a three-month low of £210,495, after falling from £211,671 in August.
It comes as HMRC stamp duty revenues have reached record highs of £12.8billion in the 12 months to the second quarter of 2017.
Critics believe the tax is responsible for the recent slowdown house price growth.
Lucy Pendleton, from estate agents James Pendleton, said: “We’re back into negative territory and the annual growth rate has been broadly shrinking like a tyre with a slow puncture since the middle of last year so no surprises that the trend has continued.
“The annual rate of growth has more than halved in a year, from 5.6 per cent 12 months ago.
“Robust stamp duty figures aren’t necessarily a sign of confidence.
“People are being forced to pay more and some markets are struggling because of it simply because it now costs too much to move. As soon as you get above £1.2million it is causing a notable slowdown in transactions.”
Stretched affordability, especially in London and the South East, is also likely to be keeping a lid on the market, according to Robert Gardner, Nationwide’s chief economist.
He said: “While measures of housing affordability are not particularly stretched at a UK level, pressures are evident in some regions – especially London and the South of England.”
However, lack of supply is set to keep house prices from crashing.
Mr Gardner added: “Constrained supply is likely to continue to provide support for house prices.
“The stock of homes on estate agents’ books remains close to 30-year lows and the number of new homes coming onto the market remains subdued.
“As a result, we continue to expect prices to rise by around two per cent over 2017 as a whole.”