House prices fell by 0.1% last month but have reached their lowest level since December 2009, according to the latest LSL/Acadametrics house price index.

This follows a 3% drop in the second quarter of 2011.

The number of properties sold in Q2 2011 was 5.9% down on the same period of 2010. This is primarily a result of the continuing restriction on demand from tight mortgage lending criteria, LSL said. It believes lenders worried about the economic picture in the UK and beyond are reluctant to return to high-volume lending at high LTVs.

David Brown, commercial director of LSL Property Services, said: “The fact that prices have only fallen by 0.1% means the steep declines seen between April and June have ceased. Transactions met their expected seasonal rise of 5% in July. This indicates that the market is not falling off a cliff in the short-term