The property market experienced its traditional new year bounce with the number of house-hunters reaching a six-month high in January, research has indicated.
The average number of potential buyers registering with estate agents jumped to 252 during the month, up from 227 in December, although the figure was 13% lower than January last year, according to the National Association of Estate Agents.
There was a slight increase in the number of homes on the market, with the average estate agent having 69 properties on their books, compared with 64 in December.
The group said the increase in activity had been caused by a backlog due to the freezing weather in December, as well as people putting moving plans on hold during the festive season.
But it added that the lower level of potential buyers compared with a year ago suggested that many consumers were still reluctant to enter the market.
The NAEA also reported an increase in sales, with the typical estate agent branch selling six properties in January, up from four the previous month.
Michael Jones, president of the NAEA, said: "It is encouraging to see activity levels begin to increase following the downturn we saw in December where bad weather and the Christmas festivities kept many house-hunters away.
"However, when compared with our report from this time last year, the market is still showing signs of consumer reluctance. Macro-economic issues such as the VAT rise and interest rate pressures continue to put many people off searching for property.
"What we need to see now is the Financial Services Authority using its newly gained powers of oversight to ease mortgage lending restrictions that are preventing so many first-time buyers from entering the housing market."
The proportion of sales to first-time buyers fell slightly during January, dropping to 24%, compared with 25% in December.
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Meanwhile, figures from the Department for Communities and Local Government (CLG) showed that house prices rose by 0.5% in December, to leave the average home costing £208,148 - 3.8% higher than at the start of 2010.
But the quarter-on-quarter figures, generally seen as a smoother indication of market trends, showed that property prices fell by 0.4% during the three months to the end of December, compared with a 0.2% rise during the previous three-month period.
The annual rate of house price inflation fell in all regions of the UK, apart from Wales, Scotland, the East Midlands and the South East.
Northern Ireland continued to see the highest rate of house price falls, with properties in the region losing 16.1% of their value during 2010, while London saw the strongest gains at 6.9%.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "The CLG data do not materially change our view that house prices will continue to trend down gradually in 2011 after losing ground overall in the latter months of 2010.
"Specifically, we suspect that house prices will fall by around 5% in 2011 and end up losing around 10% from the peak levels seen in the first half of 2010."
