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House price falls are prompting people to return to the market in the hope of a bargain, according to new research.
The Royal Institution of Chartered Surveyors (RICS) said that enquiries from potential buyers had risen for three months in a row.
It is the first time this has happened since the end of 2006, with seven out of 10 surveyors saying lower house prices are responsible and 48% believing that buyers think the bottom of the market is now in sight.
Since property prices peaked in 2007, Halifax and Nationwide house price indexes have shown a drop of around 20%, but many surveyors think the fall in transaction costs is nearer 30%.
The main bulk of enquiries are from existing homeowners, while 38% of surveyors also reported an increase in interest among investors.
But first-time buyers are continuing to be frozen out of the market as lenders demand high deposits, with only 23% of surveyors reporting a rise in interest from people taking their first step on to the property ladder.
There are now just three mortgages available for people with a 5% deposit, and 88 for those with a 10% one.
Research from the Intermediary Mortgage Lenders Association also showed that 58% of first-time buyers were unable to get a mortgage through their broker during the final quarter of 2008, although in half of these cases this was because the most suitable product was not available through intermediaries.
The RICS research comes as property website Rightmove said that asking prices in England and Wales jumped by 1.2% during the four weeks to February 7, as sellers were falsely optimistic about how much their home was worth.
But it added that interest from potential buyers was booming, with inquiries during January more than double those seen a year earlier.
Simon Rubinsohn, RICS chief economist, said: "Interest from owner occupiers is likely to persist over the coming months as those with large deposits look to capitalise on the drop in house prices.
"However, a sharply deteriorating employment picture may eat away at this improvement in sentiment, pushing potential buyers back to the sidelines."
Copyright © Press Association 2009
