The Nationwide House Price Index for April reveals that the average house price is now at £151, 861, down 15% from the same time last year.
The three-month on three-month rate of change, thought to be a smoother indicator of short-term price trends, improved from -4.1% in March to -3.1% in April.
Fionnuala Earley, chief economist at Nationwide, says the extension of the Stamp Duty holiday announced in the Budget last week may act as an incentive for first-time buyers together with low interest rates and house prices.
But she remain sceptical that this will be the case as she believes it is more likely buyers will remain cautious while they think prices have further to fall.
Earley welcomes the introduction of government guarantees for mortgage-backed securities but adds: “Since the availability of credit is only part of the reason why the housing market is in the doldrums it is unlikely to lead to a swift turnaround in its fortunes.
“Lenders have already indicated that the availability of credit is less of an issue than it has been, but at the same time expect that the demand for secured lending will fall further.
“Given the weakness of the economy and the expected further increase in unemployment this comes as no surprise.”