Property website Rightmove's latest index warns that the housing market hangs in the balance as the usual autumn pick-up in prices has not materialised.
The September issue of the Rightmove House Price Index shows house prices are static after a 2% fall in August and that a housing stalemate has been reached.
It reveals prices are falling for lower value homes, particularly flats and terraced housing, and there are signs that the market is starting to readjust in order to tempt back first-time buyers.
Five consecutive weeks of falling prices were reported in the last index but prices have levelled out with virtually no change over the past four weeks. It found asking prices have declined by just 0.01% since August 14.
Average prices drifted down marginally from £192,335 on August 14 to £192,316 on September 11.
Miles Shipside, commercial director of Rightmove, says: “We're at a readjustment phase in the housing market. Five consecutive interest rate rises plus the fact that house prices have risen beyond what people can afford or are willing to pay are draining activity and contributing to an environment in which buyers are reluctant to commit.”
The situation varies around the country with regions in the North, South and East all seeing small price rises over the four-week period while modest falls occurred mostly in western regions and Greater London.
The largest rise was 1.5% in the East Midlands, taking prices up to £157,559. Prices in Greater London fell 0.7% to £169,979.
Shipside adds: “We're faced with a housing stalemate as prices and activity adjust from a seller's to a buyer's market.”