A BBC News report today revealed home prices in London fell 3.2 percent in August, the first monthly drop since the government-run Land Registry began publishing its figures in 2000.

Prices sank in England and Wales by 1.9 percent last month, with the average property now costing 174,493 pounds, or approximately $321,495, which is some 8,320 pounds less than a year ago.

Adding to the distress are tanking home sales, which, according to the latest Registry figures in June, plummeted 56 percent from a year earlier to slightly more than 54,000.

BBC News interviewed Seema Shah at Capital Economics who said "house-price falls are gathering momentum. With transactions less than half of their level a year ago, coupled with the fact that the outlook for the economy is steadily deteriorating, the speed of this housing market correction still has the potential to step up a gear."

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