A leading estate agent says his findings confirm those of the latest house price index in suggesting that prices are turning negative in London and the south east - but he says wider market factors are limiting the scale of price falls.
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, was responding to the latest Nationwide Building Society index which showed house prices increasing at a slower pace last month.
The society says house prices grew 2.1 per cent year-on-year in March, slower than the 2.2 per cent increase seen in February and well below some analysts’ expectations.
On a monthly basis, house prices dropped unexpectedly by 0.2 per cent in March - the second successive monthly drop following February's 0.4 per cent decrease.
"Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rate" said Robert Gardner, Nationwide's chief economist.
"Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year," Gardner added.
London was once more the weakest performing region of the UK with annual house prices falling 1.0 per cent in the first quarter.
Leaf says this reflects what has been revealed in other surveys recently - higher and still rising prices in northern areas in contrast with London and the south east.
“Prices in the latter are turning negative as buyers and sellers come to terms with new market realities. Fewer forced sellers and less dependency on mortgages means that the level of price falls is staying low” he suggests.
“This pattern began in early 2015 in response to higher stamp duty, tax changes, affordability and Brexit uncertainty, despite lower interest rates and unemployment. There’s a long way to go but if this price drift downwards continues, the north-south divide will continue to narrow, although there’s no sign of any larger market correction at present” concludes Leaf.