Their house price index showed that house prices fell 0.1% in July, suggesting the steep decline between April and June has slowed.
The average house price in July was £217,300.
Dr Peter Williams, chairman of Acadametrics, said: “The market is moving backwards, taking with it the modest gains seen in 2010 and in the early months of 2011. That said, the July 2011 price is still significantly higher than the £200,234 to which the average fell in April 2009, at the low point in the last recession.”
LSL and Acadametrics said that the wealth of competitively priced mortgage deals on offer have failed to stimulate demand.
Transactions were down 5.9% year-on-year in July in the face of lenders’ tight mortgage lending criteria and restriction of volumes at high LTVs.
Transactions recorded an expected seasonal rise of 5% in July, indicating short-term stability in the market, but LSL said the long-term outlook remains weak.
David Brown, commercial director of LSL Property Services, said that low transaction levels have not stopped lenders competing for market share with low-risk borrowers, with five-year fixes below 70% LTV dropping under 3.40%.
He said: “Those able to convince lenders they are a low-risk borrower are taking their chance to get onto the market at a favourable time and this has driven transactions for larger properties. The 22% growth in mortgage lending for house purchase announced this week by the CML is testament to this.
“Of all types of property, flats have shown the weakest growth in transactions. This indicates that the first-time buyers who would normally be driving the market for smaller properties remain excluded from the market.”
London continued to buck the trend of price falls in the rest of England and Wales, with house price growth of 5.6% over the last four years. However, in real terms, this amounts to a fall of 7.5%.
Nationally, LSL and Acadametrics revealed that house prices have fallen by just over 17% in real terms, significantly reducing homeowners’ ability to fund additional spending through equity release but giving cash and low LTV buyers good value.
Williams said: “Although the housing market in England and Wales is depressed, it is very clear that in some areas and for some properties there is an active market with rising prices. Market segmentation is strengthening, with some markets being underpinned by high numbers of cash buyers.
“Although there has been a shift from owning to renting, it is clear that there is still an underlying appetite to own a house and the question in part is how to translate that hidden demand into activity.
“More innovative mortgage products will help, but a stronger outlook for the UK economy is the essential key. Little wonder that Whitehall is very focused on its review of growth prospects and of ways to stimulate activity.”
