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30th Jun 2009
House prices rise 0.9%
House prices rose by 0.9% in June, the third rise in the past four months, shows the latest survey from the Nationwide.
The rise shrank the annual rate of decline to 9.3%, from 11.3% in May.
It has also pushed the average house price up to £156,442 from £154,016 in May.
Martin Gahbauer, chief economist at the Nationwide, says at £156,442, the average house price across the UK was still 9.3% lower than a year ago, but this marks the first time since July 2008 that the year-on-year fall has been in single digits.
He says: "The three month on three month rate of change - a smoother indicator of the short-term price trend - turned positive for the first time since December 2007 to stand at 0.9%, up from -0.4% in May. If the pattern of price movements seen in the first half of the year is repeated over the second half, then prices could show only a small single digit fall for 2009 as a whole.
"This would represent a stark shift from trends seen at the turn of the year, when most indicators were pointing to a repeat of the large declines seen in 2008."
Prices have stabilised despite very low house purchase activity
He adds: "House prices have now risen in three of the last four months, suggesting that the improvement that began to show up in March represents more than just statistical noise.
"What is unusual about the recent trend reversal, however, is that it has taken place against a background of transactions activity that is still very low by historical standards.
"Although it has risen from the all-time record low reached in November 2008, the industry-wide number of mortgages approved for house purchases is still 55% below its long-run average and 33% below the trough reached in the 1990s downturn.
"Normally, such a low level of house purchases would be associated with falling house prices.
"Alongside the low level of mortgage approvals, however, there continues to be a relentless drop in the stock of property available for sale, as potential sellers and builders have responded to depressed demand conditions by reducing the supply of property coming onto the market. As a result, prices have been able to stabilise even in the face of very low demand." |
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