House prices have fallen in nine of the past twelve months with fiscal austerity and a weak jobs market hitting house prices “like a ton of bricks”.
Prices on average are 0.6% lower than in February last year at £151,986.
Richard Sexton, director of e.surv, part of LSL Property Services, said: “The only people sustaining the housing market are the elderly and the wealthy.
“The first-time buyer market has withered away. These older buyers are the only ones in a position to take advantage of record low mortgage rates as they have been able to use the equity from their homes to secure cheap deals.”
Sexton said this has created a two-tier market and disproportionate reliance on wealthier borrowers.
And he added: “While the high end of the market sees a steady flow of activity the bottom end is in gridlock.
“Affordable rates are of little consolation to first time buyers who can’t raise the big deposits demanded by banks and building societies. This is suppressing activity and dragging down prices.”
LSL predicts first-time buyer numbers could drop away even further now the stamp duty holiday has passed.
“What’s more the cost of funding mortgages is increasing for banks which will force them to scale back their lending to buyers with small deposits over the spring and early summer,” Sexton said.
