There is some much-needed good news for the property market today as estate agents report a rise in demand for housing. According to the latest survey of estate agents by Hometrack, demand climbed 10.6 per cent in June.
However, tempering any euphoria is the fact that average property prices today are 3.9 per cent lower than at the same time last year, according to the research.
The property analytics business says the improvement in sales volumes is mainly because of a bounce back in activity following a subdued May. But Richard Donnell, director of research at Hometrack, said it was also a reflection of lower prices and greater realism by sellers.
"While average prices have slipped back by 1 per cent over the month, sales volumes have increased off the back of higher demand and greater realism over achievable prices on behalf of sellers," he said.
There remains a huge divide between London and the rest of the country, effectively creating two separate property markets.
The time taken to sell a home ranges from a low of six weeks in London, where the market is still comparatively busy, to 14 weeks in Wales.
Overall the average time on the market is holding steady at 9.7 weeks compared with 10.2 weeks at the start of the year. Meanwhile the proportion of the asking price being achieved is 92.8 per cent compared with 91.9 per cent six months ago.
While demand is slightly stronger, prices are set to continue their downward spiral. "The number of homes for sale on agents' books grew by 3.5 per cent in June following a 3 per cent increase in May," Mr Donnell said.
"While the balance between supply and demand is not significantly out of kilter, subdued demand and weak consumer confidence are set to keep headline prices under modest downward pressure over the months ahead."
Looking across the first half of 2011, the housing market was holding up better than many had expected, albeit at low transaction levels, Mr Donnell said.
But there is not enough reason for optimism in the figures to make him be more positive about the year as a whole.
"The second half of the year is set to see subdued demand keeping a further downward pressure on prices," he said. "Overall we still expect headline house prices to be down by 2 per cent over 2011."