In a market described as anything but strong, UK housing remains touch and go heading into the fall selling season, according to Hometrack Ltd.  House prices reflected that sentiment as they fell for a second straight month in August.  House prices dropped another 0.1% compared with July, while demand for houses also slipped for a third straight month.

Currently an analysis is taking place by Bank of England officials on the impact the government backed scheme Funding for Lending is having on the market.  The housing market continues to struggle even though the scheme provides quality motivation for home remortgagers and original home mortgagers.  The scheme provides extra low interest rates through lenders even though a high deposit is required.

Richard Donnell of Hometrack commented on the current state of the housing market, saying: “The market remains in a fragile state.  As the supply-demand balance weakens, we expect to see slow downward pressure on prices over the remainder of 2012.”

Although prices in 90% of the regions tracked by Hometrack rose, London failed to see an increase in house prices for the first time this year.  For the year, prices are off 0.5% in the capital city.

In general, supply has outpaced demand for the year by a 19% to 10% margin.  This difference is adding further downward pressure to house prices.

The market continues to struggle as the fall season quickly approaches.  Consumer confidence continues to be low regarding the economy and the Euro crisis has not helped in reviving hope for the economy regionally.