The Royal Institution of Chartered Surveyors (Rics) said a net balance of 8 per cent of surveyors reported prices falling rather than rising in April – the most negative figure since November 2012, albeit only a slight decline.
Price falls in London are heavily weighing down the overall price growth reading across the UK.
Rics said that in London, a balance of 65 per cent of surveyors saw prices fall over the month rather than rise – the weakest reading since February 2009.
Its report said: “Survey feedback suggests it is the upper and middle priced tiers of the market that are proving the most challenging.”
Nearly seven in 10 (69 per cent) surveyors reported sales prices are coming in below asking prices for properties valued at over £1 million.
This figure was 74 per cent for properties listed between £500,000 and £1 million.
In contrast, most (59 per cent) said sales prices were either at the same level or slightly above asking prices for properties marketed at £500,000 or less.
Falling prices were also still being reported in the South East of England, and also in the South West of England for the first time since May 2013.
Meanwhile, house prices continue to rise in Northern Ireland and Scotland, the report said.
Looking ahead, a balance of 31 per cent of surveyors expect house prices to be higher in a year’s time, with the strongest sentiment in Scotland and the North West of England.
But expectations remain downbeat in London, with 20 per cent more surveyors predicting a further decline over the year to come.
Buyer demand and sales held steady over April, the report said, with Scotland showing the most upbeat assessment for sales prospects over the coming year.
Across the UK, average stock levels on estate agents’ books were broadly unchanged in April, although still close to an all-time low seen in February.
Simon Rubinsohn, Rics chief economist, said the housing market typically tends to see a pick-up in activity at around this time of the year.
He continued: “However, once this seasonal pattern has been allowed for the underlying trend in transactions still remains broadly flat.“
Earlier this week, Halifax reported that house prices fell by 3.1 per cent month-on-month in April – the biggest monthly decline since September 2010.
It followed a 1.6 per cent increase in March which Halifax said reflected “the volatility in the short-term monthly measure”.
Brian Murphy, head of lending for Mortgage Advice Bureau (MAB), said: “Following on from reports earlier this week that the average house price had cooled last month, it’s not a huge surprise to find that the opinion amongst Rics members points to the market cooling last month, not just in areas that were already seeing values recede, such as London and the South East, but in the South West, which previously had seen significant increases.
“It’s also interesting to note that the report clearly suggests that the middle and upper levels of the market are seeing asking prices not being achieved in many areas, both in the super-prime multimillion league, but also in the £500,000 to £1 million category – which is, realistically, the cost of a family home in many areas of the South East and London.
“This is potentially a combination of mortgage affordability and the cost of SDLT (stamp duty land tax) in the middle tier, both of which are proving challenging for those wishing to move up the ladder.”
