House prices are expected to fall by 1.2% in January according to the reallymoving house price forecast.
The forecast also reveals that average property prices are predicted to continue to fall, dropping by 2.5% in February.
Furthermore, based on the analysis of purchase price data from 30,000 conveyancing quotes, reallymoving believes that the average property price in England and Wales will peak at £352,239 in December, before falling to £343,312 by February 2021.
The data also shows that between July and December 2020, the proportion of first-time buyers in the market fell by 12% compared to the same period last year.
Rob Houghton, chief executive of reallymoving, said: “Our prediction of a New Year change in fortunes for the housing market has been further strengthened by the latest data which clearly shows price growth entering a downward trend in January and accelerating in February.
“The mask is beginning to slip on the two-tier housing market of recent months, which has seen activity from equity-rich homeowners who are less affected by the pandemic, concealing problems at the lower end of the market where FTBs have benefited little from the stamp duty holiday and faced considerable challenges securing higher loan to value mortgages.
“The kind of growth we’ve seen over the last few months was never sustainable.
“Despite positive vaccine news, which will certainly boost confidence that the end of the pandemic is now in sight, there are significant challenges for the housing market to overcome in the short term.
“[This includes] the end of both the stamp duty holiday and the furlough scheme on 31 March, which is likely to result in further downward movement in prices over the first half of next year.”