According to the NAEA, the slight increase in successful house sales reflects the fact that sellers are becoming more realistic about the asking price of their homes.

However, despite the increase in sales, the number of house hunters dropped from an average of 211 in September to 196 in October, indicating that some buyers are holding back as prices are expected to fall further.

According to the NAEA, the average price for a terraced house in October was £151,305, down from £154,843 in September. But analysts are predicting that house prices will continue to fall over 2009.

Commenting on the statistics, Richard Hair, chairman of an Essex estate agency comments on the changes in his region: “There are at last some conflicting reports from Essex members, which seems to be a big improvement! The last three have been full of gloom and despondency but there ate now some more positive signs at last.

“First time buyers are showing a welcome return, albeit in smaller numbers than we need and viewings are also on the up but still well below expectations. On the down side, the number of buyers remains very slow to commit and many are playing a waiting game in the hope of further price falls.”

And, as the number of house sales rose, so too did the amount of mortgage lending. According to the Council of Mortgage Lenders (CML), total mortgage lending for October rose to £18.7billion, up from £17.5billion in September.

However, the monthly total was 44 per cent lower than gross mortgage lending in October 2007.

Commenting, CML director general Michael Coogan said: “While lending in October ticked up from a low figure in the preceding month, the outlook is one of continuing weakness for housing and mortgage markets in the coming months, despite the Bank rate cuts in October and November.”

The majority of mortgage lenders have so far failed to pass on the full bank base rate cut of 1.5 per cent to consumers, despite the Government also launching a recapitalisation plan and the inter bank lending rate falling. Mr Coogan added: “Any recovery in lending is also being held back by the continuing shortage of mortgage funding.”

© Fair Investment Company Ltd