The average property sale price agreed in February was down by 2.5 per cent month on month to £326,276, according to the latest figures from Reallymoving.

However, the figure was 11 per cent higher than the same month last year when the average price agreed was £293,878.

February was the fifth consecutive month of house price falls, according to the index.

It forecasts completed sale prices will decline through the spring, falling by 2.6 per cent in March, 3 per cent in April and 2.4 per cent in May. 

Reallymoving predicts that prices in May 2021 will be just 0.5 per cent higher than May 2020, which suggests the decline in house prices seen since the start of the year is a reversal of inflation seen in the second half of last year.

The website captures the purchase price buyers are planning to pay when they search for conveyancing quotes through its comparison service.

Buyers typically search for quotes twelve weeks before their purchase completes, which provides an indicator of house price trends over the months ahead.

First-time buyer activity is showing signs of a strong recovery, following a 12 per cent drop in the second half of 2020, when they faced greater competition for homes, rising prices and a restricted mortgage market. 

First-time buyer share is now back up to 58 per cent of all transactions from a low of 46 per cent last September. 

Reallymoving chief executive Rob Houghton says: “We believe [February’s drop in prices] to be a reversal of remarkable levels of growth last year, although further government intervention in the Budget is likely to positively impact prices and transaction volumes heading into the summer – particularly if housebuilding volumes fail to recover quickly.

“First-time buyers are crucial to the health of the wider market and their share is recovering strongly, with record numbers using government schemes to get onto the housing ladder. 

“The mortgage guarantee scheme could really open the floodgates by giving first-time buyers with a 5 per cent deposit access to the wider market, rather than being limited to new build. 

“This is likely to have a significant effect on activity levels by enabling transactions all the way the up the chain, particularly in London and the South East where deposit levels are the most prohibitive.”