House prices in England and Wales were unchanged last month, the first time since last June that there has not been a monthly fall, Hometrack has reported.
However, the firm says that at £153,100, average house prices are now 3.3% lower than in April 2010.
It is also warning that weaker demand and rising supply will tip the market back into monthly price falls.
The volume of property listings was up 5.5% in April compared with March, and sales agreed were up 8% – although with big variations. Prices achieved fell to 92.5% of the asking price.
There were wide regional variations in the survey, with the buoyant London market masking the overall picture. Agents in 24% of postcodes said that house prices fell in April.
Richard Donnell, Hometrack’s research director, said: “The second half of 2011 is likely to emerge as a new phase where rising supply will constrain any further improvement in pricing levels.
“Weaker consumer confidence could result in a slowdown in demand which would exacerbate the pressure on prices.”
The fall in the proportion of the asking price that was achieved in April could be an early sign of buyers’ increasing power, he added.
Donnell said: “While agents are still achieving sales, pricing levels are starting to come under pressure as would-be purchasers are presented with increased choice as supply grows.”
He believes the current housing market has had three phases. The first was the first two years of the downturn, 2007 and 2008. The second, starting in spring 2009, was marked by improving confidence and improving prices.
The third phase, starting in the second quarter of 2010, has seen weaker demand and a rise in supply, with the economy driven by uncertainty, public spending cuts and the ‘inevitable’ prospect of a rise in interest rates.
Donnell does not believe any of this has changed. He said: “Over the last two months the supply of homes for sale has grown faster than new applicants – new supply up 10.7% and demand up 7%. We expect this gap to widen further in the coming months.
“This change in the supply / demand dynamics will not precipitate a major decline in house prices, but it will check the recent improvement in pricing levels.”
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