10/28/2011 12:23 pm ET Updated Dec 28, 2011

House Prices Fall By 2.6% In A Year

House prices have dropped by 2.6% in a year, bringing the average property value to £162,109, according to the Land Registry.

The figures, which cover transactions in England and Wales, show London is the only region where prices rose over the year, experiencing a 2.7% increase.

The typical London home is worth £349,026, according to the latest figures, which cover the month of September.

Commentators have said the capital's ability to attract overseas buyers as a world city has helped to keep the London market buoyant but across England and Wales house prices dropped by 0.3% in September, another decrease following August's 0.1% slump.

Property values had enjoyed a 1.3% increase between June and July this year.

Howard Archer, chief UK economist for IHS Global Insight said: "We suspect that consumers' squeezed purchasing power, tightening fiscal policy, a weakening labour market and major concerns over the economic outlook will limit potential buyers and weigh down on house prices.

"On top of that, there still seem to be significant difficulties in getting a mortgage for many people, notably including the need to raise high deposits, particularly for first-time buyers. And there is significant concern that banks' future ability to lend to home buyers could be hit by difficult wholesale funding conditions."

The North West experienced the greatest monthly rise over September, with a 1% increase in prices to average £115,057. The North East saw the greatest annual price fall with a decrease of 8.2% - as well as the most significant monthly price fall with a drop of 3.9%.

Typical homes in the North East are now worth £100,616. The most up-to-date figures show during July 2011, the number of completed house sales in England and Wales decreased by 11% to 59,919, from 67,475 in July 2010.

The number of properties sold in England and Wales for more than £1 million in July 2011 decreased by 24% to 707, from 932 during the same month last year.