House prices have fallen over the spring according to new figures released by lender the Halifax, although they are expected to stabilise by the end of the year.
The average price of a home increase between April and May by 0.1% and now sits at £160,519 but despite the small increase were still 4.2% lower than at the same time last year.
The 4.2% drop also represents the biggest annual drop since October 2009.
The Halifax explained that continued low interest rates and a moderate improvement in the economy were likely to improve the situation and see house prices level out towards the end of the year.
House prices over the past three months, often the most accurate measure of market trends, were down by 1.2%, mostly because of the 1.4% drop seen during a seasonal April.
Martin Ellis, chief economist at the Halifax added, “House prices continue to drift modestly downwards.”
“Low earnings growth, higher taxes and relatively high inflation are all putting pressure on household finances.
“Confidence is also weak as a result of uncertainty about the economic and employment outlook. These factors are probably constraining housing demand and applying some downward pressure on prices.”
Despite the fall across the country in general, house prices in London were up by 5% in April, whilst they fell by 8% in the North East in the same month.