Number of first-time buyers increases

Royal Institution of Chartered Surveyors (Rics) said 14 per cent more surveyors reported a rise in new buyer enquiries than those who reported a fall - the first since October 2006.

The combination of steep interest rate cuts and reduced property prices has renewed interest from first-time buyers.

But the renewed interest in property failed to prevent the number of homes being sold slumping to a new record low, according to the Royal Institution of Chartered Surveyors (Rics). But Surveyors expect that sales of homes will pick up going forward.

Rics spokesman Jeremy Leaf said: "Many are starting to see the current market as an opportunity to purchase a previously unaffordable property despite the worsening economic picture.

"But, unless people feel relatively confident about their job prospects, they're unlikely to even try to obtain mortgage finance unless of course trading down or seeking to release capital."

The figures caused some economists to suggest falling activity levels may now be bottoming out.

Allan Monks, of JPMorgan Chase Bank, said: "Though there have been few positives to take from the housing market data for some time, the RICS survey in November gave some hope that house purchase activity has finally troughed, and that the most intense phase of the downward price spiral is behind us."

Monks believes that the RICS research suggests that mortgage approvals could now begin rising by between 2,000 to 3,000 a month and that the number of properties marketed by estate agents will now be on the increase in a few months time.

Homes lost a further 2.5% of their value during October itself, to leave the average UK property costing £203,539.

Seema Shah, property economist at Capital Economics, said: "Sharp interest rate cuts, coupled with the growing acceptance amongst sellers that they need to lower asking prices significantly in order to achieve a sale, appear to have sparked new buyer interest."

Stephen Ludlow comments: "Estate agents must play their part in keeping buyers and sellers informed of the realities of the market place to help get things moving again."