The number of number of homes sold across the UK's top 20 cities fell by two per cent over the last year, according to data released today by Hometrack.
London has seen a seven per cent dip in transactions in the year to January while Cambridge experienced the biggest drop in sales, down 20 per cent year-on-year.
Hometrack's UK Cities index shows house price inflation rose by 10.2 per cent compared with 8.6 per cent a year ago, fuelled by a shortage of new homes – taking the average cost of a house to £231,700.
In London, prices rose by 13.4 per cent to £455,000, with the boroughs of Barking and Dagenham, Waltham Forest and Newham reporting the biggest rise in prices. Cambridge, Bristol and Oxford also reported strong growth – up 13.9 per cent, 12.4 per cent and 10.7 per cent respectively.
However, Hometrack's insight director Richard Donnell said there are signs that the annual rate of growth in high growth cities in southern England is starting to plateau as affordability pressures on would-be buyers increase.
"Slower growth in sales volumes has been a trend seen over the last 3 years across the high value, high growth cities such as Cambridge, Oxford, Aberdeen and London where house prices have been rising for six consecutive years."
"The EU referendum adds further complexity to an already complex outlook. Our analysis shows that the Scottish referendum, and the 18 month campaign that preceded it, resulted in 10 per cent fewer transactions and slower house price growth over the period relative to England," he said, adding that uncertainty surrounding the outcome of the EU referendum could have similar repercussions.