Predictions of a post-General Election bounce in the housing market have been proved wrong, a survey out today shows.
However, experts say that stability and fluidity seem to be returning to the market - even though prices have fallen for the 11th month in a row.
Hometrack, which claims to be the most in-depth, up-to-date and independent survey of house prices, says its latest monthly report published today shows an overall 0.1 per cent fall in prices in May.
The fact that the market has dipped by the same amount three months running shows that the market is stabilising, the organisation claims.
At the same time, the number of transactions has seen a ? further market improvement? this month with a 7.6 per cent rise in the number of completed deals.
According to Hometrack, the average price of a home is now #161,900 compared with a peak of #167,700 in June last year, a fall of 2.3 per cent.
The increase in activity is due to a rising number of housebuyers coming back into the market. But a continuing oversupply of properties means that it is still a buyers' market and prices are still being driven down.
On average in May sellers have received 93.6 per cent of their asking price (up slightly from April's figure of 93.3 per cent), a trend that shows falling prices have resulted in more realistic expectations.
The length of time it takes to sell a house has stretched 4.1 weeks a year to 7.4 weeks, a sign that properties are sticking on the market for longer as buyers find themselves with more options.
"House prices are falling like drizzly spring rain, slowly and over most parts of the country," said Hometrack economist John Wriglesworth.
"While there is no sunny outlook in prospect, there are no signs of a gathering storm either. The forecast for the next couple of months is dreary." Nineteen counties or areas have seen prices rise or remain static this month and 38 have seen falls.
At the top end of the scale are: central London and the City (0.2 per cent), London North (0.2 per cent), Essex (0.1 per cent), London South-East ( 0 . 1 per cent) and Northamptonshire (0.1 per cent).
Those reporting the largest falls are: South Lincolnshire (-1 per cent), Shropshire (-1 per cent), North Yorkshire (-0.8 per cent), London? North West (-0.7 per cent) and Derbyshire (-0.5 per cent).
Of the cities, 34 have seen price rises or remained static and 20 have seen price falls.
The top five are Hull: (0.6 per cent), Chester (0.3 per cent), Cardiff (0.1 per cent), Exeter (0.1 per cent) and Bath (0 per cent).
The worst falls were reported in: Shrewsbury (-3 per cent), York (-1.3 per cent), Swindon (-1.3 per cent), Lancaster (-1.2 per cent) and Gloucester (-0.8 per cent).
Mr Wriglesworth predicted that the prospects of lower interest rates and rising incomes could produce a ?mild? housing recovery in the second half of the year.
"Homes are still affordable and mortgage lenders are offering very competitive deals," he said. "All the market needs is a spark of consumer confidence to extinguish misplaced fears of significant house price falls."