According to the report, London and the East experienced the only monthly price rises with a movement of 0.2%. Yorkshire & the Humber saw monthly prices drop by 2.6%.
However former RICS chairman Jeremy Leaf said that "the month-on-month fall in the average house price is not a surprise as the market is gearing up for a change".
He added: "However, bearing in mind the historic nature of these figures, we would have expected higher transaction levels as the stamp duty deadline approaches. But with the number of completed house sales in England and Wales falling by 5% in January compared with the same month last year, there does not seem to have been the stampede that many expected. It may be that investors and second homebuyers left it really late in the day and it is February and March’s figures that will show a significant uplift in transactions."
The annual price change now stands at 6.7%, bringing the average house price in England and Wales to £189,901.
London remains the region with the most significant annual price increase at 13.9%. The North East saw the only annual price fall with a 0.7% drop.
Stuart Law, CEO at Assetz for Investors, said: “The buy-to-let boom we saw in the first quarter of the year has helped create a staggering 13.9% year-on-year increase in London property prices. However there’s already been a drop in demand for buy to let property in London since the stamp duty surcharge was introduced in April, and we can expect price strength there to fall back quite a bit, where panic buying by investors has seen many pay over the odds. London capital growth has peaked and that’s causing buy-to-let investors to turn their attention to the North of England, where it is still possible to purchase a home with a great yield on a budget of £100,000, in areas such as Manchester, Leeds and Liverpool. We are already seeing very strong demand continue in April and it has increased from levels prior to the budget as Southern buyers look North.
Following the budget announcement in March, it is clear the Northern Powerhouse will see rising prices in the year ahead, as UK and foreign investment accelerates, which means now it the time to invest. Savvy investors can get more bang for their buck, and the potential for capital growth far outweighs the cost of the extra stamp duty.”
Andrew Bridges, managing director of Stirling Ackroyd, had this to say: “House prices across the country may be coasting in neutral, but the capital is speeding ahead. London’s lead is getting larger and the demand for life in the fast lane shows no sign of letting up.
Such momentum in London also comes despite a few road bumps. Stamp duty surcharges have caused a slight slowdown at the top end of the market and particularly in the west of the capital. Gears are grinding in old ‘prime’ areas such as Kensington & Chelsea and Hammersmith & Fulham. And builders are touching the brakes on new homes in these old heartlands. Yet other parts of London are moving up the field to compensate. The new champions of the London property market are areas further east and further out.”
John Eastgate, Sales and Marketing Director of OneSavings Bank, commented: “This monthly dip in house prices contrasts with what has been a red-hot property market in March, a month when mortgage lending shot up 47% as buyers rushed to move before the stamp duty deadline for second properties. In reality, once the dust settles on the March madness and activity returns to more normal levels, house prices are likely to return to their pattern of sustained increase."
Rishi Passi, CEO of Oblix Capital, added: “The stamp duty stampede of buy-to-let investors rushing to complete house purchases and sales ahead of April’s tax changes ramped up demand for properties across the country in March, but this heightened activity wasn’t enough to lift overall UK house prices, which fell by a modest 0.5% between February and March. This is good news for first time buyers, as will be the forecast that prices may well moderate further in the coming months as we witness the full effect of the new tax burdens on buy to let landlords."
Sarah Beeny, owner of estate agent, Tepilo, said: “Despite the rush by investors to beat the stamp duty rise which has now come into force, prices month-on-month have fallen somewhat. I don’t think this is anything to worry about as the market is correcting itself after some months of strong gains, particularly December and January. I really hope that what we’ll see now is more opportunities for first-time buyers to enter the market which would be a healthy development and would make the property market a lot more stable.”
Andy Knee, chief executive of LMS, comments: “A monthly dip from February to March will cause hopeful homebuyers to breathe a sigh of relief that house prices have not stretched further out of reach. But year-on-year, a 6.7% rise across England and Wales is cause for concern. In London particularly, where house prices rose 13.9% annually to exceed an average value of £534,000, homeownership is fast become possible for only the very wealthy.
Despite government intervention to aid first-time buyers, such as Help to Buy, Starter Homes and the Lifetime ISA, these schemes fall short of making property more affordable for millions.
Continued speculation about Brexit in the lead up to the June 23rd referendum may ease some of the pressures on property purchases as people wait to see which way the dice rolls, although this is unlikely to have any drastic effect on house prices. Supply of housing remains critical and addressing that is the only way to keep pricing within reach for many. The housing market appears to be robust, but a healthy market is reliant upon first-time buyers and home movers being able to keep pace, something that cannot happen if house price rises continue.”
Richard Sexton, director of chartered surveyor e.surv comments: “House prices are struggling right now, having failed to pick up following last month’s dip. And while a strong lending environment is helping prospective buyers, the affordability of current high prices is proving a final hurdle to homeownership. Slow and steady is the mantra.
“Some areas are feeling the pressure more than others. As the East of England tracks London , it’s clear that commuters are increasingly sizing up the area as an alternative to the pricey London market. There’s a danger this popularity could price out some first-time buyers, but with saving initiatives including the Lifetime ISA potentially able to boost deposit savings, the area remains a good option for many compared with the more expensive home counties.
“Across many towns and cities of the UK, supply issues continue to add further strain to the buying process, especially for first-time buyers. A lack of new builds and developments is delaying dreams of homeownership. This needs to be tackled.”
