Although overall housing market conditions improved, softening demand led to slower house price growth in July says Hometrack in its Monthly National Housing Survey.
The survey goes on to say that the key feature of the property market in recent months has been a scarcity of supply. But this eased in July with a 2.4% increase in houses for sale as market sentiment improved.
As a result house price growth eased down to 0.3% in July from 0.4% in both the previous two months.
As is normal at this time of year registrations of new buyers slowed with demand for housing reducing from 2,5% in May to 1.6% in June and then just 1% in July.
One good sign for sellers is that the average amount of time that a property is on the market, a primary market barometer, fell to 8.2 weeks, which is the lowest for six years, led mainly by short sales periods in London (3.8 weeks) and the South east (6.4 weeks).
The current discount on asking prices is back to 2007 levels at 5.6% and firmer pricing is drawing vendors to the market.
Hometrack says that it expects to see more property coming on to the market as vendors take advantage of improving conditions, but as ever in summer demand will continue to slow.
The full report can be found here.
Richard Donnell, Director of research at Hometrack, said:
"The latest survey shows overall housing market conditions continuing to improve with shortening sales periods and vendors achieving lower discounts on asking price. However, the rate of house price growth slowed slightly in July as a result of weakening demand as we enter the holiday season. The momentum generated over the last six months looks set to moderate in the short term with less upward pressure on prices. The year has got off to a strong start. The level to which new buyers enter the market in the autumn will dictate whether 2013 turns out to be the year with the highest increase in house prices since the start of the downturn."