Sunny side of the street

Published 01st Jun 2009

The new Nationwide house price survey has revealed further signs of recovery in the UK housing market, with news that property prices rose by 1.2 per cent this month, the second rise in three months...

Buyers continued to return to the market in May as house prices rose for the second time in three months.

The Nationwide Building Society research showed that the annual rate of decline has slowed to 11.3 per cent, down from 15 per cent in April.

The rise in house prices of 1.2 per cent takes the average price of a UK home to £154,016, up from £151,861.

Things were looking up for lending too - the British Bankers' Association said that the number of mortgages approved for house purchases rose by four per cent in April compared with the previous month, rising from 26,671 to 27,685 approvals.

The upward movement of house prices could be explained by a shortage of homes on the market, due to lower building levels and sellers delaying putting their home on the market.

Lee Bramzell, Chief Executive of portal PropertyIndex.com, said, "Despite the bashing that the property market has taken over the past two years, Nationwide's data reinforces evidence that there are definitely some positive factors at work.


"The current shortage of stock may artificially boost prices a little but lessons have been learnt. As supply increases over the next few months, with more homeowners no longer wanting to delay their next move, a cautious confidence will gradually rebuild the property market. This low-level buzz is welcomed," he added.

Nationwide is also cautions to pop the champagne corks just yet, as rising unemployment and the ongoing tightening of lending criteria means house prices are likely to resume their downward spiral. However, it did say that conditions in the market had improved during the past few months.

Estate agents have also been reporting an influx of potential buyers as historically low interest rates and recent house price falls tempt people back to the market.

Nationwide's Chief Economist Martin Gahbauer, said, "During the downturn of the early 1990's, there were many months during which prices rose, only to fall back down again in subsequent periods.

"Although the short-term trend in house prices has clearly improved from where it was at the beginning of the year, it is still too early to say that the market is turning definitively.

Source: ' TMC '

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