House prices in England and Wales decreased by 3% on an annual basis in September, according to the latest e.surv house price index.

The data reveals that the average house price in September totalled £355,100, which is unchanged from August.

While sales activity has improved, prices have been subdued in recent months with sentiment increasingly affected by uncertainty about jobs and the wider economy and in particular by potential tax changes in November’s Budget.

It adds that expectations of a further cut to the Bank of England’s base rate have also reduced.

Lower prices year-on-year have been seen across much of the country since the Spring, with local areas seeing declines outnumbering those recording gains by more than three to one.

The northern markets have retreated in line with much of the rest of England and Wales.

Annual price movements in August were weaker than three months earlier in all areas except for the South West and North West.

Southern markets and especially the South East continue to account for much of the overall market weakness, but other regions are also acting as a drag and they are joined by Wales.

Commenting on the latest data e.surv head of research Rob Owens says: ”The latest house price report for England and Wales shows that transaction volumes have stabilised following earlier distortions caused by stamp duty changes.”

“Sales activity in July and August returned to typical seasonal levels, suggesting that the market has now absorbed the impact of those policy shifts.”

“However, while volumes have recovered, prices remain under pressure. Average house prices in September stood at £355,100, unchanged from August and 3% lower than the same time last year.”

“Market sentiment continues to be weighed down by economic uncertainty, concerns over employment, and speculation around potential tax changes in the upcoming November Budget.”

“With downsizers and landlords adding supply to the market, and refinancing pressures mounting for borrowers, price growth remains constrained. Regionally, price declines have been widespread, with southern markets – particularly the South East – leading the downturn.”

“London was the only area to record a modest annual increase. Despite current challenges, structural undersupply and latent demand from aspiring homeowners suggest that any Budget measures aimed at stimulating housing could quickly shift momentum.”