British nationals who moved to Dubai and took up residence there are creating a new demand for new homes for sale, according to one expert.

John Charcol Dubai says ex pats who have moved to the Emirate are now looking to buy properties rather than rent them.

Soaring rents appear to be encouraging Brits to splash out, even among those who did not move to the UAE with a view to investing in property.

John Charcol Dubai chief executive Chris Dommett said:

“The era of pumping hard-earned income into oblivion for rent is dissipating within Dubai’s expat community as educational awareness of the local mortgage market increases and home lending services become more accessible.”

The firm also said the growing volume and variety of Dubai mortgage options, coupled with low interest rates, are also enticing a growing number of ex pats to tap into the region’s booming real estate industry and invest in their own property.

Property investors looking to sell homes they have bought in Dubai could find the house-hunting ex pats create a new sales market.

English house prices fell one per cent in June with even London recording a significant 2.5 per cent drop.

Latest figures from the Land Registry show prices have declined for the tenth consecutive month while sale completions are now 39 per cent down on April 2007, at 57,831 compared to 95,223.

The North East bucked the downward trend by being the only region to record growth at 1.4 per cent month-on-month.

Prices in London fell more than any other region in England and Wales, taking the average house price in the capital to £345,136. The average price overall stands at £180,781.

The West Midlands was the area with the biggest year-on-year fall, recorded at 2.3 per cent.

There was some good news for property investors on Monday as the National Housing Federation commented on an independent report showing the UK will recover in 2010 to take the average house price to £274,700 by 2013.

Quoted by the Daily Telegraph, David Hollingworth, of mortgage broker London and Country, said:

“The Land Registry figures add to the growing catalogue of data reflecting falls in prices from one month to the next.

“The figure that will concern many is that London is shown to have suffered the largest regional change, falling 2.5 per cent. Often used as a barometer for the market, if London is not faring well then it provides little comfort for the general housing outlook.”

An independent economic report has said the average house price in England will rise by 25 per cent after the market stages a recovery in 2010.

The National Housing Federation (NHF) said the study by Oxford Economics shows prices will continue to fall into 2009 but will rapidly increase again by 2011.

By 2013, the average house will cost £274,700, according to the statistics.

Demand is expected to eventually surge again as at “least” 223,300 households are expected to form each year to 2026.

NHF chief executive David Orr said:

“Demand for housing is going up, while the supply of new homes is going down. This means that as soon as the economic outlook improves house prices will resume their previous upward trajectory.

“People are living longer, they’re delaying getting married and they’re more likely to get divorced - meaning we now have more households than ever.”

He added even though house prices have fallen, affordability has not improved “one iota” and called on the Government to work with housing associations to ensure housing targets are met.

The report by Oxford Economics, called Home Truths 2008, said:

“Demands for 25 per cent deposits are now common and Bank of England interest rate reductions and liquidity injections have done little to loosen mortgage lending terms.

“First-time buyers are consequently in as difficult a position as they were at the height of the market.”

The news comes as figures from the Land Registry showed prices fell by an average of one per cent in June.