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    by Myra Butterworth

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House sales halve

The number of homes changing hands has halved since August 2007.

Around 85,000 properties worth more than £40,000 were sold during the month, down from 90,000 in July, according to HM Revenue & Customs.

The figures highlight the current subdued state of the housing market, as although they were up on the 79,000 transactions that took place in August last year, the level was less than half the 162,000 homes that were sold in August 2007, before the credit crunch impacted on the market.

The data comes the day after the Council of Mortgage Lenders said lending last month had fallen to its lowest level for August for a decade. There is traditionally a dip in lending between July and August, but the latest drop was more pronounced than in previous years.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS), said: "The HMRC data continues to demonstrate the subdued level of activity in the residential property sector. Despite ongoing concerns about the prospects for the economy, the latest RICS Housing Market Survey showed sales expectations are improving.

"However, with mortgage finance still in short supply and little evidence of a meaningful shift in behaviour from lenders, it is hard to see this slightly more optimistic mood being translated into significant higher sales volumes."

Today's figures add to a run of gloomy data on the housing market, with Nationwide reporting price falls of 0.9pc during August.

Many potential buyers have adopted a "wait and see approach" due to concerns about the state of the economy, job security and the impact of future tax rises. This, combined with an increase in the number of homes coming on to the market, has helped to relieve the previous mismatch between supply and demand, which was one of the main factors that pushed up house prices during 2009.

The drop in activity seen since the beginning of this year has prompted some economists to predict the market could be heading for a double dip.

But others have said recent falls in house prices are not unhealthy as the recovery in the property market had got ahead of improvements in the wider economy.

Many commentators expect house prices to end this year at around the same level they started it, before trading sideways for much of 2011.