House prices edged up for the first time in five months as the market remained flat, new figures have revealed.
South West prices saw a 0.8% month-on-month increase to reach an average of £172,311, according to market trend data released this week by Land Registry.
The latest figures released for January follow a 0.6% drop in December and come in the context of a 0.2% rise over the past year.
Nationally, house prices increased by 1% month-on-month to reach £162,441 as analysts said there had there had been "tentative signs of a pick-up" in recent months.
David Robinson, branch manager of Stags estate agents in Launceston, described the Westcountry market as "broadly flat but price-sensitive".
He said: "There is a lot of activity taking place and buyers are focusing on value for money. The South West market is, for the first time in a long time, competing with other parts of the UK including West Wales, Norfolk and Suffolk."
Richard Copus, a Devon estate agent and spokesman for the National Association of Estate Agents, said: "In the last 12 months the market has been a little more back to normal. Prices haven't really changed at all and are practically as they were at the end of 2005.
"The market is healthy and stable. Brand new houses are selling like hotcakes. People are starting to downsize now rather than carry on waiting, in line with a slight increase in overall transactions.
"No-one knows what the market will do in the long term, but I'd expect a few more nice rural properties to become available in the spring. Things are slowly picking up."
Last week the National Association of Estate Agents (NAEA) said the year had started strongly for first-time buyer sales, with one quarter (25%) of sales last month made to this group, marking a two-year high.
Mark Hayward, president of the NAEA, said: "The financial barriers that have plagued the market for so many years may be beginning to ease as banks increasingly look at new ways to assist buyers."
The number of mortgages on the market has increased by around one third since the Government introduced its Funding for Lending scheme in August, giving lenders access to cheap finance to help borrowers.
Robert Gardner, Nationwide's chief economist, said improvements in the job market would bolster demand from potential buyers amid better mortgage conditions.
"There are reasons for cautious optimism that activity will gather momentum in the months ahead," he said.
"However, progress is likely to be gradual, as stubbornly high inflation will continue to exert pressure on household budgets.
"Moreover, buyer confidence is likely to remain fragile until there are signs that the wider economic recovery is firmly entrenched."
Figures released by Halifax for the South West showed that buying was cheaper than renting in December, with average monthly buying costs at £697 – while average monthly renting costs were 5% higher at £737.
