Transactions in England and Wales are at their lowest level since the new graduated rates of Stamp Duty were introduced, but may be starting to improve, figures suggest.

Data from property investor London Central Portfolio (LCP), based on cumulative Land Registry sales registered in the 12 months to July, show residential property transactions fell 2% in that period to 876,628.

This is the lowest annual figure since the new graduated Stamp Duty system was introduced in 2014, LCP said.

Average prices in England and Wales are up 2.5% annually in the 12 months to July to £293,897, while new-builds are priced at a 21% premium at £343,175, according to the research.

The capital has seen a bigger drop in sales, down 8.3% over the 12 months to 3,831 in prime areas and 6.5% in Greater London to 88,189.

Average prices in prime central London (PCL) are up 12.5% annually to £1.96m, while Greater London saw a 2.2% increase to £293,897.

The data also shows that new-build prices in London have reached record highs, at £3.4m in PCL and £784,892 in Greater London.

Naomi Heaton, chief executive of LCP, said: “There are very few causes for optimism in the domestic property market, where real terms, inflation-adjusted house prices are no higher than they were in 2007.

“Affordability remains heavily constrained in a post-Mortgage Market Review world, where wage growth struggles to out-pace inflation.

“Artificial stimulation of the market through Help to Buy and first-time buyer incentives has supported the market but there is a general reticence amongst up- and down-sizers to commit at this point.

“The continued lack of a defined exit plan from the European Union, combined with economic uncertainty and a number of punitive tax changes targeting the buy-to-let sector, have caused the market to stagnate.”

However, official Land Registry data suggests transactions actually picked up last month.

Its latest Price Paid Data for July 2018 shows 89,454 residential sales lodged at the Land Registry last month.

This was up 12.2% on June and the third consecutive month that registrations have increased.

The figure is also up 1.7% annually.

There is a time lag between a property sale and its registration, but the Land Registry said 24,719 transactions took place in July of which 526 were of residential properties in England and Wales for £1m and over.

The most expensive residential sale was of a terrace property in the Royal Borough of Kensington and Chelsea, London for £18.5m, while the cheapest was a terrace property in Henllys, Cwmbran, for £6,120.