The latest data from haart estate agents reveals that the average London house price has fallen by a further 1% in July to £245,017 from £247,703 in June. However, prices are 8% higher than they were this time last year.

Despite the predicted bounce back in activity post World Cup, rising activity levels have been stifled during the hottest July since records began. The lower level of property viewings has resulted in the average percentage reduction in asking price rising to 3%.

However, first time buyers are continuing to show confidence in the market and are capitalising on the summer sale with first time buyer levels rising to their highest in 12 months.

Summer sale

The summer dip in activity is requiring sellers to accept as much as a 4.8% reduction in their asking prices in North London, where average prices are higher than South East London.

Paul Smith, chief executive of haart estate agents commented: "As the hot summer months cool down the activity in the property market, only the properties that are correctly priced are being snapped up."

"In this heatwave, people would rather be out at barbeques and enjoying the weather than shopping for houses. With fewer applicants viewing properties, sellers are often not in the driving seat and should keep their prices keen to ensure a sale."

First time buyers - bargain hunters

First time buyer levels are at their highest level in 12 months, having risen 2% in July to 28% of the market share as their confidence remains high.

Paul Smith continued: "The temporary dip in the market and the drop in prices have encouraged first time buyers to return. For those who are closely monitoring the market and waiting for prices to match their budget, now is the time to hunt for a good bargain."

"Despite interest rates rising last week, the selection of competitive mortgage deals currently available means that first time buyers are more able to afford mortgage repayments."

London-wide variations

The North of the capital saw July’s largest price decrease at 4.1%, setting its average at £229,628, and the month’s greatest average percentage asking price discount of 4.8%.

The South East region of London was the only region to see a price increase of 4.9%, bringing its average price closer to those of the other regions (£223,502).

"The South East has been boosted by the increased demand due to the good schools in the area and the shortage of suitable property," said Paul Smith.