Nationwide reports a rise in UK house prices for the first time in 16 months
Following on from Halifax reporting a rise in house prices in January, Nationwide now reports the average house price increased by 0.9 per cent to £150,946 in March in contrast to February. In February they reported house prices falling month-on-month by 1.9 per cent. This monthly rise is a seasonally adjusted figure.
This rally lowers the annualised rate of house price declines from 17.6 per cent to 15.7 per cent.
Nationwide welcomed this sign of stability, but stressed that “It is far too soon to see this as evidence that the trough of the market has been reached.”
Chief UK and European economist at IHS Global Insight, Howard Archer is reported as saying “…there are increasing signs that the housing market may have passed its worst point, helped by the substantial fall in house prices from their 2007 peak levels and markedly reduced mortgage rates.”
However Archer added that it is important not to read too much into the rise.
Nationwide’s House Price Index (HPI) shows house prices falling every month since October 2007, with the typical home plunging in value from a peak of £186,044 to £147,746 by February 2009.
In another sign of stability, mortgage approvals have picked up, albeit from low levels. In February they increased by 19 per cent to 37,900 – the highest level since May 2008.
Nationwide said: “The upturn is welcome and is certainly a signal that there is some movement in the market. It is more likely to reflect the return of buyers who have delayed purchasing through the worst of the financial turbulence at the end of 2008 rather than the beginnings of a swift recovery.”
Consumer confidence and spending traditionally tends to shrink when home values, most people’s biggest asset, are on a downturn. House price stability is therefore regarded as one of the conditions necessary for a wider economic recovery.
What do you think – are you looking to buy or still waiting for further evidence of a recovery?
