This is according to the LSL/Acadametrics House Price Index for December 2010. The index also showed the number of transactions continued to decline - falling in December 2010 by 5% - and were down 33% compared to December 2009, while regional disparities are widening.
Commenting, Richard Sexton, director of chartered surveyors e.surv, part of LSL, said: "While average house prices are falling, the steady rate of the decline indicates a degree of resilience in the market.
“While it is true that there is a shortage of buyers seeking new properties, this is largely driven by the continuing drought in mortgage finance. Although the average LTV for first time buyers rose to 80%, the total number of house purchase loans is down 4% - indicating that mortgage refusals have become more frequent.
“Nevertheless, there are currently plenty of would-be buyers available to take on mortgage products where they are offered and for those with a large amount of spare cash, the current market still represents a good opportunity to invest in affordable property.
“The disparity between the regions is widening. In traditionally high-value areas such as London and the South East price growth has been significantly stronger than the national average and this is likely to continue through 2011.
“Public sector cuts will have a particularly heavy impact on prices in northern England and Wales and this means the value -gap could become a chasm as the year goes on.”
