April saw house prices fall at their lowest rate for over a year as potential buyers returned to the market, research has shown.

Housing intelligence group Hometrack revealed that only 32% of postcode districts reported price falls during the month, compared with 59% in February.

The average cost of a home in England and Wales dropped by 0.3% during April.

The number of potential buyers registering with estate agents rose by 6% during the same month, with an increase of 32% during the past quarter.

There was also a 15% rise in the number of sales agreed, according to figures.

However, the group warned that there could be no broad-based recovery in the housing market without first-time buyers, despite the positive data.

It said the decline in price falls was likely to reflect estate agents' increasing optimism on the back of higher market activity at the start of 2009.

However, it warned that rising sales levels were being driven by cash investors and the buyers of family homes who had large equity stakes in their existing properties.

Richard Donnell, Hometrack's director of research, said: "While the pick up in demand and sales volumes is real, it is important not to lose sight of the broader picture.

"The volume of housing sales is set to be less than half the level that would constitute normal market conditions.

"In the rush to seek out the green shoots of recovery, the importance of first-time buyers in driving the market is often underestimated, and the fact remains that the majority remain affordability constrained and unable to access mortgage finance."

He said this fact suggested that the recent pick up in demand was largely seasonal and unlikely to be sustained over the rest of the year.

The Council of Mortgage Lenders said last week that lending had increased by 16% during March, while HM Revenue & Customs published figures showing that the number of homes changing hands soared by 40% during the same month.

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