In the year to November, prices fell by 0.7% although London prices rose 3.1% since November 2010 – making the capital the only region to see growth in England and Wales.
Commenting, David Brown, commercial director of LSL Property Services, said: “Static house prices don’t mean property values are standing still. For buyers looking to get onto the market, 0% price growth means that in real terms property is becoming more affordable.
“With inflation running at 5%, the real cost of property is getting smaller and smaller, which is good news for buyers and mortgage borrowers alike.
“The resilience of property prices indicates that mortgage lenders and property buyers have not so far been spooked by the gloomy news emerging from the eurozone.
“Although prices have declined by 0.7% since November 2010, the rate of annual price decreases slowed everywhere except the North West and the East Midlands, with London - buoyed by foreign investors seeking a safe haven in the capital’s bricks and mortar - showing an acceleration in price rises to 3.1% last month.
“Low mortgage rates, along with the stamp duty holiday on properties below £250,000 and the modest boost provided by the government’s FirstBuy scheme, have all contributed to prevent larger falls in 2011.
“According to the Council of Mortgage Lenders, mortgage lending increased 9.8% in the year to October and has risen for the last three consecutive months for the first time since the summer of 2007, which has contributed to the 4.5% rise in transactions seen last month.
“However, we’re yet to see any significant decrease in the size of the deposits lenders require.
“Among buyers who have substantial deposits, demand remains strong and the rise in mortgage volumes suggests many people in this position are taking the opportunity to secure good properties while mortgage finance and property prices make purchasing a more and more affordable option.”
But there is good news. Dr Peter Williams, housing market specialist and chairman of Acadametrics, said: “There has been a reduction in the rate of annual decline of house prices in all regions except the North West.
“Last month, we were reporting the opposite trend, with all regions witnessing bigger falls in house prices on an annual basis, except for the West Midlands and Greater London.
“This latest shift goes against almost all the housing analysts predictions, ourselves included, and suggests that the outcome for the housing market in 2011 is likely to be closer to a fall of around -1.0%, against our earlier predictions of -2.5%.
“This is good news for existing owners and even for those buyers in a position to purchase who can feel more confident about entering the market.
“All recent economic news and commentary has been negative regarding future prospects - too negative, some now suggest.
“Major change is underway in the housing market but it is important not to let this lead to a view the new world might be unrecognisable.
“Although there will be more renters, home ownership will remain the dominant tenure and there will be a continued flow of households onto the housing ladder. Households will continue to move reflecting job and personal circumstances.
“Perhaps the big unknowns at this stage are the likely output of new homes and the flow of mortgage finance.
“The current House of Common’s Communities and Local Government Select Committee enquiry into these issues is particularly timely, and should act as a powerful reflection on the government’s recent housing strategy statement, which offered only a limited strategic overview of the market although setting out a myriad of new measures.”
