Demand for top end property jumps

Prices rose by 0.3% in July compared with a year earlier and by 0.8% on the previous month.

London saw the biggest rises, with prices up 6.5% on the year.

The number of properties worth more than £1m sold in the year to May in England and Wales more than doubled to 562, the registry added.

The North West experienced the greatest annual price fall with a decrease of 3.9% while the North East saw the most significant monthly price fall with a decrease of 2.1%.

Tracy Kellett, director of the buying agents BDI Home Finders, said: "Like a drunk uncle at a wedding, the housing market is still dancing in slow motion on the spot.

"For every small step forward, there is an ungainly lurch backwards.

"So while London is making strong progress, prices are still dropping in the North.

"All this despite a buoyant first half of the year, when we saw many would-be buyers come off the fence and start househunting in earnest.

"That early spike in demand should be converting into a surge of completions now, so the fact that it is not is deeply worrying.

"Demand and viewings have tailed off dramatically over the summer, with the combination of holidays and the Olympics meaning househunting was often the last thing on people's minds.

"When that lull feeds through into the sales figures, the effect will be surely be negative. So if prices are stuck in neutral now, there's every chance they could slip back into reverse in the coming months."

Ashley Alexander, director, estate agent review website, added: "It's progress of sorts. Modest growth is nudging the property market into 'stagnation lite'.

"With rent levels continuing on an upward path, demand from would-be buyers is rising even though supply of credit is tight. And with stock levels still on the low side, the effect in the South has been to nudge prices up again.

"The regional divergence is more acute than ever, with London prices powering ahead while they fall in the North.

"The summer months are traditionally quieter, and that effect has been magnified by the Olympics effect in July and August. The Land Registry data has a significant lag effect, and has yet to show the full impact of the quiet summer.

"With estate agents facing tough competition to win instructions from sellers, many have been tempted into valuing high. But it remains very much a buyer's market, and only the competitively priced properties are selling well."

And Kristjan Byfield, director of estate agents, Base Property Specialists, said: "The property market is hardly fluid but it's hanging in there. The collapse many predicted has failed to materialise.

"Transactions have certainly slowed over the summer but then that's to be expected.

"We're not expecting fireworks in the autumn. With the economy where it is, and lenders still pedantic at higher LTVs, the market will continue to plod along for the foreseeable. Every sale is a struggle.

"The regional month-on-month figures tend to bounce around but if there's one clear trend it's that London and the South East are far more resilient than the rest of the UK, especially the North which is looking vulnerable.

"Anyone wanting to sell in the current market must get their pricing right and be extremely realistic or they can forget moving.

"What we are finding is that, in many cases, it's better to underprice as that triggers a bidding process that can result in a higher end sales price.

"What we are definitely seeing is a sea change in people's relationship with property. More and more people are resigning themselves, and not even grudgingly, to long-term rentals. People's philosophies surrounding property have changed quite substantially.

"Rather than gear themselves up on debt, those people still aspiring to buy are saving and doing things the old-fashioned way. It may be a while before these people get onto the ladder but when they finally do the property market will be in a far healthier position.

"People have fundamentally reassessed their relationship to debt."