The property market will be back on track by Easter, according to the National Association of Estate Agents (NAEA). Although property prices fell by 1.2% last month, it still finished the year 6.4% higher than it was at the end of 2003. Many agents have reported that interest in property is increasing, and this may prompt first time buyers to return to the market. "Over the second half of last year, as average prices stabilised, property became more affordable for many and the percentage of first-time buyers rose," said the NAEA.

The president of the NAEA, Richard Hair said: "The current downturn will prove to be short-lived and the figures we are reporting this month show that annually, prices are up by over 6% and activity is good for the time of year.

"Together with the upbeat reports we are receiving from the agents on the front line, and the wider economic conditions such as low interest rates, we fully expect UK house prices to be showing positive monthly growth again by the spring."