The firm noted that prices paid dropped 2.4 per cent from January to February – the fifth consecutive month of falls and expects this to continue until May.
By then it believes prices will be just 0.5 per cent higher than May 2020, suggesting the decline seen since the start of the year is simply a reversal of house price inflation during the second half of last year.
The firm captures the purchase price buyers have agreed to pay when they search for conveyancing quotes which is typically 12 weeks before they complete.
Its most recent data indicated that February prices continued to head downhill as the window for buyers to benefit from the original stamp duty holiday closed.
“This will be reflected in Land Registry Price Paid data in May 2021 – though the downward trend is likely to be reversed as the stamp duty holiday extension once again boosts demand,” it said.
It continued: “Following a Christmas peak, completed sale prices will decline through the early spring, falling by 2.6 per cent in March, three per cent in April and 2.4 per cent in May 2021.
“The impact of the original stamp duty holiday deadline of 31 March is clearly evident in the value of deals being agreed last month, as buyers factored in the additional cost and sellers were forced to accept lower prices.”
Help to Buy at record level
Reallymoving noted the proportion of first-time buyers was recovering following a 12 per cent drop in the second half of 2020, their share is now back up to 58 per cent of all transactions from a low of 46 per cent last September.
Use of Help to Buy and shared ownership is already at an all-time high.
“With loans expected to become available imminently through the mortgage guarantee scheme, there’s a significant opportunity for first-time buyers to access the housing market in the coming months with a relatively small initial cash outlay,” it firm added.
Reversing ‘remarkable growth’
CEO Rob Houghton believed the falls were “a reversal of remarkable levels of growth last year”.
He added: “Further government intervention in the Budget is likely to positively impact prices and transaction volumes heading into the summer – particularly if housebuilding volumes fail to recover quickly.
“First-time buyers are crucial to the health of the wider market and their share is recovering strongly, with record numbers using government schemes to get onto the housing ladder.
“The mortgage guarantee scheme could really open the floodgates by giving first-time buyers with a five per cent deposit access to the wider market, rather than being limited to new build.
“This is likely to have a significant effect on activity levels by enabling transactions all the way the up the chain, particularly in London and the South East where deposit levels are the most prohibitive.”