Year-on-year, house prices fell 1.4% in June.
The research revealed that the average house price at the end of June was £219,365, similar to the January 2010 average, but above the low of £200,234 in April 2009.
Housing transactions saw a 20% rise between May and June, compared to a typical average rise of 7% at this time of year. Yet, the report noted this activity overall remains subdued.
Richard Sexton, business development director of e.surv, said: “In the current market, a monthly fall of 0.8% is relatively large. The greatest downward driver on national prices is the decrease in the price of high-value homes due to a slump in demand following April’s Stamp Duty rise for homes worth over £1m.
“A flurry of activity in March saw transactions for £1m plus properties rise 58% higher than the level of March 2010 and this created a temporary spike in prices in this sector of the market which has now evaporated.”
However, he added that putting price falls solely down to high-value homes ignored the weaknesses in the market, with eight out of ten regions in England and Wales recording price falls in the three months to June.
Sexton said: “This indicates the impact of the continuing shortage of mortgage finance.”
David Brown, commercial director of LSL Property services, added that the need for substantial deposits is stalling the first-time buyer market.
He said: “The good news is that there has been an increasing number of higher LTV deals trickling onto the market in recent weeks. But with doubts lingering over unemployment this year and the anaemic growth in the economy, credit conditions remain tough and lenders are unlikely to abandon their cautious stance and completely open the taps for buyers without very large deposits.
“With the provision of social housing not up to scratch to meet the accommodation needs of Britain’s increasing population, the onus will remain on the private rental sector to soak up demand from the growing number of frustrated buyers.”
