Demand for housing in July dropped by -1.3% triggering the first fall in prices for 15 months, according to the latest monthly survey from Hometrack.

Prices fell 0.1% in July, with the last month-on-month price fall occurring in April 2009 when prices fell by -0.3%.

Richard Donnell, director of research at Hometrack said the decline in demand is in part seasonal but the underlying trend for the last five months has been downwards.

He said: “Concerns over the economy and talk of impending spending cuts have taken their toll on market confidence and levels of demand.