Umit Emionglu's stoppage-time consolation strike wasn't enough to prevent Villa from losing against their Second City rivals.
Defensive errors proved costly for the young guns once again as Blues scored two first-half goals.
It was tough to take for Villa who had started strongly before falling two goals down.
Eminoglu reduced the deficit in injury time when he fired into the bottom corner with a terrific finish but it proved to be too little, too late.
Coach Tony McAndrew insists his side paid the price for some sloppy play at the back.
He said: "Again it was self-inflicted. We are making far too many schoolboy errors and getting punished for it.
"It is putting a lot of pressure on us because we are then chasing games.
"It wasn't a great game but I thought we were well in command before we conceded a crazy goal in the first half then an even crazier one in the second.
"We managed to claw one back in injury time but the mistakes have got to stop.
"In games like that which aren't great we need to be getting goalless draws and not gift goals to the opposition.
"We need to get a level of consistency and stop making silly mistakes.
"Umit edge of the box turned on a ball that was dropping down and fired into the corner."
VILLA: Watkins, Nelson-Addy, Bryan, Donacien, Derrick Williams, Barton, Melvin, Ward, Graham, Nelson, Drennan. Subs: Darkin [for Melvin, 52], Barrett, Eminoglu [for Barton, 52], Bateman, Daniel Williams.