The rate at which house prices are falling in the West Midlands slowed in June, according to the latest survey by RICS, the chartered surveyors' body.
Last month, the number of surveyors reporting a price fall in the region dropped to 49 per cent from 57 per cent in May, which was the highest percentage so far this year.
An additional 49 per cent reported prices remaining the same, further reinforcing the apparent easing of price falls.
RICS said that despite a national upturn in new inquires from potential buyers, the West Midlands saw a continued decline in agreed sales and inquiries, highlighting the slowdown in demand.
"New inquiries have seen a significant upturn in the region during the first two weeks of July, following the quieter period recorded in the June survey," said regional and national housing spokesman Harvey Williams.
"This is good news for the market where prices continue to dictate the terms.
"We expect to see the much-anticipated drop in interest rates by the Bank of England during August, making it a hot month for more than just the weather.
"This should boost the housing market, getting potential buyers off the beach and through the estate agents' doors. We only have to see the increasing number of profit warnings from West Midland businesses over the last three months for Mervyn King to realise the economy is in desperate need of a rate cut."
Mr Williams said the new Redrow Debut scheme at Castle Vale was welcome news for first time buyers, who despite falling prices are still struggling to get on the housing ladder.
"These properties, starting at £59,995, are sure to sell like hot cakes when they are released and highlight the ever-growing need for more affordable homes."
RICS' claim that nationally, confidence has been boosted by the possibility of rate cut was backed up by mortgage lender the Woolwich.
Expectations have picked up from the level recorded in December and virtually half of all homeowners (49 per cent) expect prices to rise over the next 12 months. Despite that, optimism is below the 65 per cent level in June 2004.
Andy Gray, head of mortgages at the Woolwich, said: "Confidence has stabilised after improving considerably from an historic low of 39 per cent of December 2004."