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While it hasn't bounced back, the latest figures from Land Registry are showing that the housing market drop over the last three months is beginning to slow.

Its figures show the rate of decline in annual house prices is easing in England and Wales – in May an annual movement of -15.9% took the average house price to £152,497.

The Land Registry found that as in April, monthly house prices fell again by 0.2% in May, compared to a fall of 0.5% in March.

Simon Rubinsohn, chief economist of the Royal Institute of Chartered Surveyors says that because completed transactions have settled down at just over 30,000 per month, and if more timely buyer enquiries and mortgage approvals data is anything to go by, the actual level of completed sales is likely to climb towards 40,000 over the coming months.

But he says: "Even this improvement, however, continues to demonstrate the adverse impact of the lack of mortgage finance on activity."

Keshav Thukaram, managing director of Smartlandlord.co.uk says the small dip will probably be followed by another, from looking at Rightmove's latest statistics. He says the Land Registry lags a few months behind Rightmove because it measures every sale of registered property in England and Wales while Rightmove's index only looks at asking prices posted by sellers.

He says: "Prices look likely to fall again after this. The problem is that mortgage rates are making it increasingly difficult for cash-strapped first-time buyers to secure home loans. So speculative landlords who piled in at the top of the market are getting very low rental yields at the moment, having expected to rely on capital gains to make a profit. These people need to look at ways of cutting costs – managing properties themselves, and using online tenant find products at a fraction of the price of an agent.

"But most landlords are in the fortunate position of needing less debt. This is a perfect opportunity for them to invest in further properties while they offer the best value for money – securing good yields for the future while expanding their portfolios."

SOURCE: RICS, Smartlandlord.co.uk, Land Registry, 26/06/09

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