House prices fall for fifth month

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However, there were also signs of improving demand, with new buyer registrations rising for the first time since last summer.

Housing market research company Hometrack said house prices fell by 0.2 percent this month to stand 1.4 percent higher than in February 2007. In January, house prices fell by 0.3 percent to stand 2.3 percent higher in annual terms.

The figures are not adjusted to take seasonal factors into account.

The average time taken to sell a property held steady at 8.5 weeks - jointly the longest period since the survey began in 2001. However, a near 8 percent rise in new buyers registering with estate agents painted a slightly brighter picture.

The biggest increase in demand was in London where new buyer registrations rose by 13 percent.

"In the wake of the credit crunch, demand for housing fell by 45 percent, but the latest Hometrack survey shows a small yet important turnaround in demand over February," said Richard Donnell, Hometrack's director of research.

"The modest increase in new buyer registrations is evidence of firming demand, largely on the back of recent interest rate cuts."

The Bank of England has cut rates twice in the past three months, bringing them down to 5.25 percent. Money markets show investors are betting rates will come down at least as far as 4.75 percent by the end of the year.

(Reporting by Christina Fincher; Editing by Ruth Pitchford)