Land Registry figures have shown that house prices in England and Wales dropped by 0.4 per cent in December, the first fall for England and Wales since August 2005.
The average price of a house is now £184,469.
The Land Registry says that this month’s data provides evidence of a ‘downward trend’ in house prices. It says: “Although the annual growth rate remains positive, this month’s price fall is a clear indication of a weakening market.”
Only three regions bucked the downward trend; the largest monthly growth was seen in the North-East at 2.2 per cent.
The volume of transactions was also down on the same period last year, with an average of 103,374 per month in the months July to October 2007, compared with 117,086 per month from July to October 2006.
Propertyfinder.com major client director Nicholas Leeming says: “With unemployment so low and incomes still rising, we are seeing very few forced sellers. Instead you get a stalemate between house buyers and sellers and transactions dry up. Sellers refuse to compromise on price and buyers refuse to commit while they fear higher mortgage payments.
“The housing market is an important engine for the economy – as people move they refurbish their homes and buy goods. And people need to move home in order to take up new jobs and meet their family needs. The Bank of England must act decisively to cut interest rates and restore confidence in the economy and in the housing market.”