House prices are likely to continue falling for the rest of 2012 as growth in the number of homes for sale outstrips potential buyers, a study says.
At the same time, a separate study has found mortgage payments as a percentage of disposable income have dropped to a 15-year low.
Average house prices fell by 0.1% in August, the same as in July, and prices are likely to drop further as the market remains fragile and volatile, property analyst Hometrack said.
Demand from potential new buyers registering with agents has fallen for three months in a row, while the number of homes coming on the market has continued to grow, albeit at a slowing rate, said the survey of 1,500 estate agents and surveyors across England and Wales.
House prices in London were at a standstill this month, showing 0% change. It is the first time in a year that prices have not increased in the English capital.
However, the number of sales agreed across England and Wales showed an unusual 6.5% increase, which Hometrack said came from a low base and was likely to be due to sales being bunched up after a prolonged period of wet weather and depressed activity levels due to distractions like the Olympics.
Richard Donnell, director of research at Hometrack, said: "The balance between housing demand and supply is widening, suggesting further downward pressure on prices.
"Demand is up by 10% over the year to date while supply has grown by 19%."
Meanwhile, Halifax has mortgage costs at a 15-year low, with typical payments for both first-time buyers and home movers taking out a new loan at 26% of take-home pay in the second quarter of this year.
Affordability has significantly improved in each of the UK's 12 regions since 2007 and typical mortgage payments as a proportion of earnings have seen the biggest falls in Northern Ireland, where they have dropped by around two thirds.
Payments have nearly halved in Wales, Yorkshire and the Humber, and Scotland since the peak of the market five years ago, according to the findings.
The study put the increased affordability down to static and falling house prices coupled with low mortgage rates by long-term standards as the Bank of England maintains the base rate at a historic 0.5% low.
Even in London, where house prices have remained relatively strong due to strong overseas buyer demand, potential payments for a new borrower have reached around 35% of disposable earnings compared with 56% five years ago.
The 10 most affordable areas are all in Scotland, with potential mortgage payments in East Ayrshire standing at around 15% of disposable earnings.
London and the South East dominate the least affordable areas, with mortgage payments in Kensington and Chelsea typically standing at 76.6% of disposable earnings.
Overall, mortgage payments have nearly halved as a proportion of income over the past five years from a peak of 48% seen in the autumn of 2007.
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