A set of figures produced by Haart suggests the market has had a difficult past 12 months - but the firm promises better is to come.
It says house prices across England and Wales in December fell by 0.9 per cent on the month and by 3.3 per cent on the full 2017 year. The average house price now sits at £229,562.
New buyer demand for homes fell by 3.4 per cent on the month and is still down 7.4 per cent annually.
The number of properties coming onto the market is also sharply down by 16.8 per cent in December and for the 2017 year as a whole.
The average purchase price for first time buyers fell 3.2 per cent in December but was up by 8.5 per cent on the year.
This comes as the number of first-time buyers entering the market has risen by 1.1 per cent in a month and by 4.1 per cent on the year.
As the average purchase price has fallen, so has the average amount paid of a deposit - down 2.3 per cent in 2017.
“2017 was hardly plain sailing, but the market is now significantly stronger and 2018 will be another year of price growth. In December the market began to pick up and we have started to see transactions rise towards levels last seen in the months before the stamp duty surcharge change and the vote to leave the EU” according to Haart chief executive Paul Smith.
“However there remains a severe lack of homes on the market, and as a result of this I expect we see UK price growth of between three and five per cent, and a more modest one to three per cent in London” he claims.
“The newly introduced stamp duty cut and the Help to Buy scheme have made it easier for first time buyers to buy new build, if they can afford a deposit. 2018 could be the year of the first time buyer if the stamp duty cut bears fruit.
“However for those in the middle of the ladder, second steppers and downsizers are still lacking the motivation to move. The government must do more to help them, and stamp duty for these groups remains a big disincentive holding the market back” he concludes.