Mood is optimistic despite a new fall in UK house prices

Normal service resumed in the property market today when Nationwide, the country's biggest building society, said house prices partially reversed last month's surprise mini-jump.

April figures showed the average house price fell 0.4% from March, when valuations rose by 0.9%.

House prices on average are now £151,861 across the country.

But despite clear evidence that last month's improvement was a blip, there were still some economists taking heart from the relatively small April decline reported by Nationwide.

"It still suggests the underlying rate of decline may be starting to ease," said Howard Archer, economist at research group IHS Global Insight. "Furthermore, there are increasing signs overall that housing market activity may have passed its worst point, helped by the substantial fall in house prices from their 2007 peak levels and sharply reduced mortgage rates."

Nationwide added that this month's drop helped improve affordability for struggling buyers, while the Budget's extension of the stamp duty holiday for homes under £175,000 would help in some parts of the country.

However, Fionnuala Earley, Nationwide's chief economist, cautioned: "But it seems more likely that, for the most part, buyers will remain cautious as long as they think that prices will continue to fall."

Refusing to talk of the much sought-after "green shoots," Earley added: "While affordability is indeed more favourable and there does seem to be some cautious optimism from some quarters, it is still far too soon to say that this is the start of a solid revival in the market."

She added: "The housing market is very sensitive to income and, as a result, conditions in the labour market are crucial to performance."

Most experts are now predicting unemployment to rise sharply for the rest of the year.

A recent Nationwide survey showed consumers expect prices to fall over the next six months, although at a slower pace than before.