A comprehensive end of year survey by the leading property firm Strutt & Parker shows that average house prices declined only slightly at the end of 2004, and several parts of the country were unaffected.

Unsurprisingly the biggest changes were in the South and South-East, with Berkshire seeing a fall of 9%. The West Country and Suffolk were also affected, with both figures being around 6%. In most other areas south of the Midlands the fall was around 3 to 5%. Contradicting that trend though, prices in Essex rose by 3%, and East Kent stayed level.

There has been no discernable move in property values in North Yorkshire, prices have levelled. As James Gloag of Strutt & Parker says, ‘The North is still active and confident. Right across the region interest rates are seen to still be relatively low and at that level mortgages are affordable.

'Of the properties we sold from our Harrogate office in the run up to Christmas, an impressive 80% sold at or above the asking price.'

Typically an attractive three bedroom cottage in North Yorkshire and the adjoining areas in the North-East will now be worth £350,000, a five bedroom family house with two acres £800,000, and a larger country house with between 15 and 20 acres £1,500,000.

The other exceptions to the downward trend were all in the north, with Strutt & Parker's offices in Chester, Moreton-in-Marsh, Morpeth all showing that values have remained level. Scotland continues to be strong, bucking the national trend; the firm's Edinburgh office reported the country's highest rise of 3%.

The Survey, which is conducted quarterly across Strutt & Parker's 22 residential offices in England and Scotland showed several other key elements of the current property market:

• The most important factor in the existing conditions is pricing. Properties initially overpriced will stick, but well-presented, realistically-priced homes are selling.

• Buyers remain cautious. They are taking longer to make up their mind which house to buy.

• Several offices reported that although activity dropped away in late summer and early autumn, the end of the year was busier than expected. The interest rate rises had an effect, but people see employment remaining high and commercial confidence buoyant, and interest rates at current levels remain affordable

• The market has only stalled, and has already become active again early in January. Life goes on – home-owners move jobs and have to relocate, families need more space, older generations want to downsize or move to a different part of the country – and they're not easily going to be put off achieving those ambitions.

It's widely thought that there will be a General Election in May 2005, and as a direct result interest rate levels are unlikely to change significantly. An in-coming administration is not going to ruin its honeymoon with the electorate by allowing rates to rise in a hurry. In the past governments have often cut interest rates in a run up to an election, but there is little scope to do so now.

All the major parties have discussed alterations to the different property taxes, but as none has published their manifestoes yet it's impossible to know if those thoughts will become commitments.

Summing up the report, James Gloag, who is based at Strutt & Parker's Harrogate office says, ‘To a degree the adjustments we see in these statistics were expected, but overall the property market is in good shape. We expect the early months of 2005 to be busy, though it's going to be a challenging time for estate agents – in more difficult trading conditions, properties are sold by the most experienced and diligent agents'