Neighbourhood: Are house prices in your area really rising?

Richard Catlin
21 December 2009

A host of new figures and reports show UK house prices rising at a rapid rate, and paint an optimistic picture of the prospects for 2010. As with most statistics though, the optimism needs to be taken with a pinch of salt.

Property price website Zoopla suggests that house prices have been rising by £4 a day since April of this year, whilst Nationwide reports the increase as £700 in November alone. It's generally agreed that the increase has been driven largely by demand outstripping supply, with many homeowners sceptical of the benefits of moving in the current market.

The Royal Institution of Chartered Surveyors (RICS) also reported that its members have witnessed average prices showing an upward trend for the sixth consecutive month. In stark contrast, Rightmove said that they witnessed a second consecutive month-on-month fall.

Most of the signs are encouraging for homeowners, especially after the huge drop in values in 2008 - which wiped an estimated £384 billion off of the market as a whole - but it's too early to say that the housing crash is over and that growth will be sustained into next year.

Some experts are predicting that current prices are over-inflated by a few 'cash rich' entrants to the housing market, and that once this levels out, combined with more properties becoming available, they could drop back as much as a further 10% next year.

Additionally, although the headline figures are based on national averages, there are significant differences across the UK, both in the current average price and the rate of growth. Whilst London and the South East witnessed virtually no drop at all on October 2008 prices, average prices in Wales dipped a further 2.8% according to the Land Registry.

One way to get around the conflicting reports on how house prices are performing in your local area is to check your postcode on checkmyfile. Not only will you be able to see the exact prices that each type of home has sold for recently, but also find out what the trend is - good or bad.

If you are having trouble getting a mortgage in the current tight market, try this specialist broker.

Whichever way prices go in 2010, it's likely that borrowing criteria will remain strict, even if Loan-to-value (LTV) ratios are eased slightly. With that in mind, it seems certain that a good credit rating will be the 'must have' accessory for 2010.

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