While the impetus for house price growth has dissipated across all parts of the country, London is experiencing a pronounced slowdown in market activity, with continued declines in the proportion of asking prices being achieved. London was the only region to record a price fall in September - of just -0.1% – with further modest price falls likely in the months ahead.

Commenting on the trends in the market, Richard Donnell, Director of Research at Hometrack, said:

“There’s a distinct chill in the air this month: after a strong run over the last 18 months, the momemtum of house price rises has started to turn with growth now at a standstill for the first time since January 2013.

“While this slowdown can be attributed partly to seasonal factors – including a slight hangover from a slow August – it’s clear that agents are wary about the direction of the market as a resut of weaker demand and lower sales volumes. Buyer uncertainty is growing in the face of a possible interest rate rise, a general election on the horizon and recent warnings of a house price bubble. The debate over economic implications for Scottish independence could well have added to the uncertainty in recent weeks. Played out against a backdrop of tougher mortgage affordability checks and limits on high loan to income lending, higher value postcodes of inner London are clearly being impacted.

“This loss of momentum in price growth comes at the end of a very strong run of 18 months, in which the market was fuelled by pent-up demand, with Help to Buy fanning positive market sentiment. That surge of demand has now receded, bringing the latest cycle to an end with no equivalent buyer ‘push’ or ‘pull’ on the horizon.

“Although the lead indicators suggest that buyers will start to gain the upper hand, there are many home owners who don’t need to sell and won’t bother unless it’s financially beneficial to do so. The net result is a likely drop-off in activity in the coming months. As the build up to the election in 2015 draws imminent and political parties use the conference season to delinate their views, we anticipate an impact on market activity.”

Hometrack’s national monthly housing market survey is based on a monthly survey of estate agents and surveyors across all postcode districts across England and Wales.