New figures show a shortage of homes on the market is helping to slow the rate at which house prices are falling.
The average property lost just 0.1 per cent of its value during May, following a strong increase of 1.1 per cent in April, according to the Department of Communities and Local Government.
Separate figures also showed that surveyors expect house prices to rise during the coming quarter – the first time they have predicted an increase for more than two years.
The Royal Institution of Chartered Surveyors (RICS) said a low level of properties on the market, combined with increasing buyer inquiries, was providing a platform for “modest price increases”.
But it warned that there was unlikely to be a sustained recovery in the housing market until mortgage lending increased.
RICS spokesman Richard Franklin, of Franklin Property Consultancy, said: “Positive news on the housing market in the latest RICS housing market survey is now endorsed by further evidence on increased stability released today in the form of the CLG report.
“This places the West Midlands ahead of all other English regions with a year-on-year fall of -8.7 per cent for May. This is 30 per cent better than the UK average and significantly better than London where annual falls remain at in excess of 16 per cent.
“I believe these statistics are a result of the lower-than-average regional price in the West Midlands where property averages £158,000 compared to a UK average of £188,000.
“Those regions with higher regional averages are still those showing the greatest decline.”
In a further sign that the rate of price declines is easing, CLG said property values had fallen by only 0.4 per cent during the three months to the end of May, well down on the 4.8 per cent drop recorded during the previous quarter.
The annual rate at which prices are falling has also continued to ease, dropping to 12.5 per cent in May, down from 13 per cent in April.
Meanwhile, the RICS survey showed that a record number of surveyors saw a rise in buyer inquiries during June while the average number of properties estate agents had on their books fell further to just 56.9, about a third less than a year ago.
Howard Archer, chief UK and European economist at IHS Global Insight, said: “Latest data on house prices has been somewhat volatile. It is therefore best to try to draw an overall impression from all of the data and survey evidence available. This suggests to us that house prices have recently gained some overall support from markedly increased buyer interest as well as from a lack of new properties coming on the market.”