Which way are house prices heading?

Posted in 'Neighbourhood' by Richard Catlin

10 August 2009

It seems that the beginning of each new month brings with it a fresh wave of conflicting figures on the state of the UK's housing market and the hopes of a recovery.

With more positive noises emanating from economists about the likelihood of officially getting out of the recession before the end of the year, homeowners the length and breadth of the country - especially the estimated 1 million households in negative equity - will be eager to keep up to speed on the latest figures.

Nationwide - the UK's biggest building society - has announced that it believes house prices hit an annual peak in June, rising 1.3% in the month, putting the average property at &pund;158,871. Although average prices remain 6.2% less than last July, it means that the annual rate of decline has slowed dramatically since the 17.6% rate witnessed in February.

A similar survey by Halifax supports the view that the slump has been arrested, but in both cases, regional variations are very evident. Similarly, the overall rise wasn't evenly spread between property types - the average value of flats and maisonettes showed a greater increase than detached and semi-detached houses.

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Consumer confidence in the housing market has shown some signs of returning in recent months, with mortgage enquiries in May reported at record levels. Despite strict lending criteria continuing to be imposed by lenders, (with the notable exception of loans to footballers it seems), especially in terms of the level of deposit required, many people are keen to take advantage of the low base rate.

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