However the July data from the Index shows an annual price decrease of 2.1%. The only region in England and Wales to experience an increase in its average property value over the last 12 months is London with a movement of 1.3%.
The South West experienced the greatest monthly rise with a movement of 2.2%. The North East experienced both the greatest annual price fall with a decrease of 8.8% and the most significant monthly price fall with a movement of 2.3%.
The most up-to-date figures available show that during May 2011, the number of completed house sales in England and Wales decreased by 10% to 46,870 from 52,170 in May 2010. The number of properties sold in England and Wales for over £1 million decreased by 44% between May 2010 and May 2011, from 464 to 262.
Nick Leeming, business development director at Zoopla, said: “Low transaction levels and the year on year decline in average prices is representative of the caution gripping buyers and mortgage lenders alike.
"Lenders are beginning to offer more tempting mortgage products but the pool of borrowers who qualify for these deals is very shallow.
"In addition, the cost of day to day living is squeezing peoples’ ability to save for deposits and get onto the housing ladder leaving a vast backlog of first-time buyers anchored to the rental market.
"Until people feel more confident about their personal finances and are able to put aside money to build even the smallest of deposits the market will continue to stutter.”
Chris Gardner from mortgage website Obligo.co.uk said: "Prices rose in July but then it's hard to read too much into any month's house price data given the low level of transactions.
"The regional trending of prices, with London weathering the storm and the rest of the UK more vulnerable, is an accurate reflection of where the market is at.
"The two factors supporting house prices are low interest rates and the mortgage market, which has sparked back to life in recent months.
"At some point the return of 90%, and increasingly 95%, mortgages is going to see people turn away from the rentals market, which is starting to look like a bubble, and make the decision to buy instead.
"The fundamental issue the housing market has faced in recent years has been the weak link at the lower end of the chain.
"But as 95% mortgages become more readily available, this link will strengthen and may see the property market kick back into life.
"There are so many people who want to move right now but who can't because they cannot find a buyer.
"As mortgage availability at higher LTVs continues to improve, this situation will change and more transactions will take place.
"The housing market will continue to operate in the shadow of the economy but improved mortgage availability at higher LTVs will do it no harm."
Nicholas Ayre, director of property buying agents Home Fusion, commented: "After a week of almost unrelentingly bad economic data, the housing market has been cast in the surprising and unfamiliar role of light relief.
"Everywhere outside the London microcosm, prices are lower than they were a year ago, but they are at least showing some signs of life.
"Paradoxically this may be linked to the steady dimming of the economy's vital signs.
"With the Bank of England hinting that interest rates are unlikely to be raised for many months, a few more housebuyers are being tempted in to test the water.
"July is traditionally a very quiet month, so as we look ahead this glimmer of hope seems brighter.
"But there's another factor at work - the supply of housing. The Land Registry data were released just hours after the Home Builders Federation revealed that planning permission approvals have dropped by almost a quarter since this time last year.
"If the shortage of housing gets worse, prices will inevitably creep up.
"But that's hardly a vote of confidence in what remains a depressingly depressed housing market."
