A rare glimmer of light emerged for the housing market today as Nationwide, the country's largest building society, said that prices fell much less sharply in November than October.

This month's fall in prices of 0.4% was less than a third of the 1.3% fall seen last month and meant the annual rate of decline was reduced from 14.6% to 13.9%. This is the first snapshot view of the housing market in November and could prove a one-off. Figures are due from Halifax next week, while official Government numbers will be released in December.

Nationwide chief economist Fionnuala Earley warned against calling a great turn in the housing market, which has been falling since October 2007.

"The rate of house price falls moderated significantly in November But with the economy in recession conditions do not appear very favourable for a swift recovery in the housing market," she said. "The labour market is weakening, which will inevitably hinder market demand. With prices falling at their current rate there is still little incentive for new borrowers to hurry into the market."

Other analysts were more sceptical. Howard Archer chief UK economist at IHS Insight said: "We doubt very much the markedly reduced monthly drop in house prices in November marks the start of an improving trend for house prices as the fundamentals remain largely remain unfavourable."

The Bank of England is widely expected to cut interest rates for the second month running next week.

Earley said the surprise cut of 1.5 percentage points at the start of this month would significantly help existing and new homebuyers. She said the one-third of borrowers with tracker mortgages would already have benefited from the rate cut. The one-fifth of borrowers who are on standard variable rates had not necessarily had all the full benefits passed on to them, but most had now received most of the 2.75% worth of cuts seen since December 2007.

For the 50% of borrowers with fixed-rate mortgages, Earley said they should now face considerably less of a shock at the end of their existing deals.

Across the country, the average house price is now £158,442. That is roughly £25,000 less than it was this time last year but still £25,000 more than it was five years ago in November 2003.