House prices slipped for the third month in a row, as the number of property transactions plummeted, according to the latest index from Your Move via LSL Property Services and Acadata.
House prices fell by 0.1 per cent in April, when compared to the previous month.
Over the same month property transactions fell by 25 per cent, with an estimated 50,000 transactions in April.
LSL Property Services says this was significantly greater than the usual 5 per cent seasonal decline.
Some of this contraction may be due to the adverse weather. The so-called ‘beast from the East’ hit at the end of February, which may have reduced house-hunting activity, impacting on transactions a few months later.
But there are concerns that the size of this fall reflects a more serious slowdown in market activity.
Annually, property prices have risen by 1 per cent, but this is the eleventh consecutive month that this annual rate of growth has fallen, providing further evidence of stagnation in the property market.
The average property in England and Wales is now priced at £302,252.
Despite this overall slowdown, the index showed there were pockets of regional growth.
One of the biggest boom areas is Wales, where house prices are up by 4.8 per cent, year-on-year.
Within this region, the cities of Cardiff and Swansea have seen annual house prices rises of 9.7 per cent, while the Value of Glamorgan (10.2 per cent), Torfaen (10.4 per cent) and Monmouthshire (11.3 per cent) have all seen double-digit price rises.
The only region of England and Wales to deliver faster house price growth in the last year was North Somerset, where prices have risen by 13.6 per cent – largely due to the ‘Bristol boom’ expanding outwards.
LSL Property Services says these price rises in Wales are largely due to tax changes. A new land transaction tax was introduced in April, starting at a higher base (£180,000) than stamp duty in England (£125,000). This new tax is paid at a higher rate though, particularly for properties priced between £400,000 to £925,000, with tax rates at 7.5 per cent and 10 per cent.
It is thought many buyers have brought forward purchases of high value homes to avoid this new tax.
Elsewhere, other regions to enjoy strong house price growth include the East Midlands and the North East (both up by 3.9 per cent annually), while house prices in the North West have grown by 3.6 per cent.
London is the only region of England and Wales where prices have fallen on an annual basis (down 2.5 per cent). The average property in the capital is now £601,808 — this is £15,415 lower than a year ago.
Price falls in London continue to be concentrated at the top of the market with eight of the 11 most expensive boroughs – including Westminsiter, Wandsworth and the City of London – seeing prices fall in the last year.
The one exception to this is Kensignton and Chelsea, where prices are up by 23.7 per cent.
At the other end of the scale, price growth in the cheapest 11 boroughs is positive on an annual basis, albeit at a modest rate of 0.1 per cent.
Your Move’s managing director Oliver Blake says: “London remains the exception rather than the rule when it come to the strength of the market in the major cities of England and Wales, which remains strong.
“The market remains slow though when it comes to the number of transactions.”
While the decline in house prices appears to be slowing, it remains to be seen whether this applies to transactions. Other indices have paint a similar bleak picture.
Muted activity has been underpinned by a shortage of properties being put up for sale.
The Royal Institutions of Chartered Surveyors’ ‘new instruction indicator’ for April continued to decline, and average stock levels on estate agents’ books remain close to all-time lows.