House prices have dropped by 3.9% over the past year and are set for further falls as sellers become more realistic about the value of their property, according to a survey.
The number of sales agreed by agents rose by 10.6% in June - its highest level for three months - after the market was boosted by sellers agreeing to lower prices, according to housing intelligence firm Hometrack.
Prices fell by 0.1% in June and have now dropped in 11 of the past 12 months.
They will fall by about 1% in the second half of the year as more new homes come on to the market but demand remains subdued, causing the number of homes on estate agents' books to rise, it predicts.
Hometrack research director Richard Donnell said: "The second half of the year is set to see subdued demand keeping a further downward pressure on prices.
"While the balance between supply and demand is not significantly out of kilter, subdued demand and weak consumer confidence are set to keep headline prices under modest downward pressure over the months ahead."
The improvement in activity in the housing market in June was also the result of a bounce-back after a slump in May when viewings were disrupted by bank holidays around Easter and the royal wedding.