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All eyes on Easter weekend for future of UK property market

The Centre for Economics and Business Research says that an analysis of property transaction data shows that July is almost always the peak month for moving in the UK. So with a typical three to four month lead time from first enquiry to completion, the Easter weekend is one of the most important dates in the property year.

Although tiny property prices rises recorded recently by the Halifax and Nationwide are being taken as possible blips, there is still a lot of hope within the industry that the real estate market should be starting to pick up.

'The Halifax index for the first quarter of this year also showed the smallest quarter-on-quarter fall in prices since the first quarter of 2008, which is a little more interesting and a possible sign that prices are starting to bottom out,' said Ben Read, managing economist at the CEBR.

He also points out that February saw mortgage approvals increase by 20% to 37,000 but this is still small compared with the pre-credit crunch monthly average of almost 100,000.

The figures are tiny but real estate agents are hoping they are a sign that things are set for improvement.

Analysts point out that despite the banking bail-outs and the onset of quantitative easing bringing slow but steady improvements, credit conditions will remain relatively tough for some time.

But with base rates at an all-time low, even a relatively modest rise in mortgage approvals to around 60,000 to 70,000 per month may be enough to offset the impact of the meager wage settlements and rapidly rising unemployment that will continue to unfold over the course of the year. This could lead to house prices bottoming out by the third quarter of this year, the CEBR research indicates.

Read said that he believes that mortgage approvals will increase but slowly. Under these circumstances the organisation's models suggest prices only have a further 8 to 10% to fall, and are likely to bottom out by the start of 2010, implying a much slower rate of decline than was seen through 2008.

And he thinks transactions will start to rise over the coming months as a combination of lower prices, low interest rates and slowly improving credit conditions entice buyers back to the market.