David Brown, commercial director of LSL Property Services comments:
“While house prices remain essentially static, property is actually becoming much more affordable. In the last year, home values have risen by an average of £220 per month, but to keep pace with inflation, they would have had to rise by £830 per month.
"By the same token, in the four years since April 2007, house prices have risen less than 1%, while average wages have increased by 13.7%.
“But buyers have been unable to make the most of improving affordability because despite the smaller proportion of salaries property prices currently represent, buyer confidence is low and it’s still far too difficult to get a mortgage.
"Economic uncertainty, fears over jobs, a squeeze on incomes and nervous mortgage lenders are keeping a lid on the housing market. It’s no wonder transaction volumes remain so very low.
“First-time buyers are especially hard hit. According to the CML, the number of first time buyers on the market is only 47% of the 36 year average, which demonstrates the difficulty of obtaining mortgage finance.
"While house prices currently represent a decreasing proportion of salaries, high inflation, the prospect of a Bank rate rise and public spending cuts mean lenders are still treading carefully in setting criteria for borrowers without high deposits.
“It’s important for buyers and sellers across the country to bear in mind the regional picture. While the national average price is stable, this masks a more volatile picture across the country.
"In terms of prices, London and the south-east remain the best performing regions, but in the south-east transactions over the last year have fallen more than anywhere else, while the north of England is the only region to see an increase in activity.
"When house prices fall, deposits represent a bigger chunk of potential equity and this means more buyers can come onto the market and drive activity. If transactions in London and the south-east continue to fall, this may mean prices there have reached a tipping point.”
