The average house price has risen by only 0.6% year on year in January and has fallen by 0.1% since December, the LSL and Acadametrics House Price Index shows.
The number of transactions is now just 60% of the long-term average – at just 40,600 in January while the average house price now stands at £221,211.
David Brown, commercial director of LSL Property Services, says price falls are fr less than in 2009.
He says: “We should see a bubble of increased activity at the top end of the market in the next couple of months as buyers look to hurry through purchases of properties worth more than £1m before the stamp duty hike in April. On top of this, a growing number of rich investors are withdrawing money from destabilising countries, and investing in bricks and mortar in prime locations in London.
“However, transaction levels across the rest of the market are still being suppressed by the lack of high LTV mortgages available for first-time buyers.
“At a time when wage inflation is being outstripped by inflation, would-be buyer finances are under increasing financial pressure and providing the large deposits required by lenders is unachievable for thousands of potential first-timers.”