The study showed a slow start to the year with an extension of the seasonal slowdown and weak consumer confidence.
Both buyer registrations and sales have fallen by 10.5% and 14.3% respectively and the underlying trend is one of tightening supply and weakening demand.
Concerns over the economic outlook and eurozone crisis resulted in an 11% drop in demand over the second half of 2011 and a 23% decline in buyers registering with agents between August and January.
The Hometrack survey shows a small rise in London prices offsetting falls in other regions. Hometrack said the trend looked set to continue through 2012 as the Olympics firmly focused the eyes of the world on London, and overseas buyers, in the midst of global uncertainty, continued to consider London a safe haven.
Richard Donnell, director of research at Hometrack, said: “The latest Hometrack survey reveals a market dogged by uncertainty. On a national basis house prices have not increased over the last 18 months (since June 2010) - a theme carried over into January when prices were unchanged.
“A small rise in London offset falls in other regions. London looks set to buck the national trend again in 2012 thanks to overseas buyers providing a boost to prices in London’s prime areas.
“Elsewhere demand remains constrained by the uncertain economic outlook. Some agents have also reported an increase in down-valuations as surveyors exercise growing caution.”
