By Julian Knight
BBC News personal finance reporter
Sales are down 30% this year but prices haven't followed suit
House price inflation has slowed to a crawl across most parts of the UK but property market experts have told BBC News that they do not think a crash is around the corner.
The latest surveys from the Land Registry and Office of the Deputy Prime Minister (ODPM) show annual house price inflation falling from almost 20% a year ago to about 5%.
The last time house price growth was so weak in the UK was between July and September 1996 when prices rose by 5.2% to an average of £73,559, according to the Land Registry.
Recently, mortgage lenders Halifax and Nationwide said that house price inflation was lagging behind the level of wage rises for the first time since 2001.
"The market has slowed quite dramatically. What is happening now is that buyers are sitting on their hands," Saxon Brettell, director of Cambridge Econometrics, told BBC News.
The Land Registry said that the volume of property sales continued to fall, slipping by 27.7%, but this was smaller than the 34.8% drop seen in the first three months of the year.
At the same time, there are signs that the wider UK economy is slowing, with heavily indebted consumers spending less in the shops.
So does this drop in sales activity combined with a gloomier economic outlook mean that the long predicted housing market correction is already underway?
Mr Brettell thinks not.
"The economic fundamentals supporting the housing market are still reasonably strong," he says.
"Consumers are spending a little less, but we are not seeing sharp falls in confidence or rising unemployment, the two tell-tale signs of housing market trouble."
Instead, Mr Brettell sees the housing market as suffering a period of torpor rather than price collapse.
"At present, buyers do not feel the need to chase the property market. At the same time, there is no imperative for homeowners to sell as they are in work.
"This all spells a long period of calm for the housing market," Mr Brettell says.
Consumers and house buyers received a boost last week when the Bank of England's Monetary Policy Committee cut UK interest rates to 4.5% from 4.75%.
As well as reducing mortgage payments for homeowners, the cut in rates should bolster confidence among the UK's shrinking band of first-time homebuyers, Helen Adams, director of property website Firstrungnow, says.
"The effects of a rate cut are felt most keenly by first-time buyers," she says.
"They may not have a mortgage yet but, nevertheless, they become more confident that the direction of interest rates is downwards and are more willing to take the plunge."
And according to Dan McLeod, director of London estate agency firm Atkinson McLeod, buyers - many first-time buyers - are already returning to the market in the capital.
"We have had a quiet twelve months or so with little competition among buyers.
"But during the past couple of months there has been a change of mood, buyers no longer expect sellers to reduce their prices."
Mr McLeod's assertion that buyers are returning to the capital's housing market is borne out by the ODPM survey.
London was the only part of the UK to see annual house price inflation rise between May and June.
Annual inflation increased from 1.6% to 1.8% between May and June in the capital.
The London market is key, according to Ms Adams.
"What happens in the London property market creates ripples which spread out to the south east and then beyond.
"If the market is rising (in London) it will feed through to the rest of the UK."
However, London house prices are not set to roar away as they did between 2000 and 2004, setting the whole property market ball rolling again.
"Such small rises are not inconsistent with a market that has slowed markedly," Mr Brettell says.
"What we are seeing now isn't a prelude to another round of price rises or even a collapse, but a flat market."