The latest data from an independent network of estate agents, Spicerhaart, shows that London house prices have decreased by a further 0.1% in August, with average house prices now standing at £226,218.

This suggests that the market has continued its gradual downward trend with no immediate signs of recovery.

However, despite the overall decline in house prices East London has reported a considerable boom, with 5.8% inflation over the month. This is due to the successful Olympic bid, and we will continue to see higher than average price changes in the future, says Spicerhaart.

Key findings: London house prices decreased by 0.1% in August Buyers typically achieving 2% reduction of asking price Activity up 15% on last year First-time buyers drop to 22% of the market share

Paul Smith, chief executive of Spicerhaart, said, "The surge in house prices in East London is just as we expected. We have seen a great deal of activity, as buyers try to jump on the bandwagon and make a quick buck out of the property market. In the coming months, and even years, we expect this above average house price inflation to continue."

Activity in the market continues to improve

Despite the ongoing malaise there has been a considerable increase in activity since August last year.

Paul Smith commented: "Our year on year figures report an increase in activity of 15%, indicating that the market has definitely improved over the past 12 months. It is in no way booming, but demand remains high and houses are still selling."

"The only ones sticking on the market are those that are unrealistically priced, and even though vendors may not want to reduce asking prices in many cases it is the only way to ensure a sale."

First time buyer levels in London have decreased from 22% in July, to just 20% this month. Although previously there had been an increase in first time buyer levels, the market is still weak and renting continues to be a far more attractive option for young first jobbers.