LSL Property Services and Acadametric’ report showed that the sharp fall in transactions in October flew in the face of the typically expected increase in sales between September and October.
While average house prices rose 0.2% in October compared to September, property prices were down 1.3% year-on-year, to an average of £220,056.
Richard Sexton, director of e.surv, said: “The sharp rise in transactions in September has given way to an October slump. At the end of the summer, a flurry of buyers jumped at the chance to take advantage of some extraordinarily low mortgage rates rolled out at the end of the summer.
“But last month growing fears about the eurozone crisis caused lenders to rein themselves in and that has reduced the volume of transactions.
“Nonetheless, the market has been supported strongly by buyers who have large enough deposits to satisfy lending criteria, which accounts for the modest price rise seen last month.”
Significant regional variations in house prices continue to be stark, with average prices outside of London falling 2.7% in the last 12 months.
Average property values in London increased 2.5% in the three months to October compared to the same period of 2010, as the massive influx of foreign investment continues. By comparison, the North of England saw a drop of 7.9% for the same period.
Sexton noted that prices in the North of England appear to be falling twice as fast as any other region, driven by lenders’ fears over the impact of public spending cuts on the region.
However, he added: “It is testament to the resilience of the national market that the ongoing economic problems the nation faces have not caused property prices to fall further in the last 12 months. This shows that where mortgage finance is made available, buyers still have a strong desire to step onto the ladder.”
