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UK prices 'stabilising'

Thursday, July 02, 2009

Source: Catherine Deshayes

Figures from both Nationwide and Land Registry show that house prices are starting to stabilise...

The latest figures from Land Registry show the rate of decline in annual house prices is easing in England and Wales, while Nationwide's figures are a bit more optimistic with prices rising for the third time in four months during June.

In May, an annual movement of -15.9 per cent took the average house price to £152,497, according to the Land Registry. As in April, monthly house prices fell again by 0.2 per cent in May compared to a fall of 0.5 per cent in March.

Wales had a positive monthly rise with a movement of 1.2per cent, making it the region with the greatest monthly change and an average property value of £119,990. All regions experienced a decrease in their average property values over the last 12 months. The region with the most significant annual price fall was the North East with a movement of -17.2 per cent.

Manchester metropolitan district experienced the greatest annual price fall with a movement of -23.8 per cent. The most up-to-date figures available show that during March 2009 the number of completed house sales fell by 43 per cent to 33,161 from 57,929 in March 2008.

The average value of a UK home rose by 0.9 per cent during the month to stand at £156,442, according to Nationwide. The annual rate at which prices are declining also fell for the fourth month in a row, dropping to 9.3 per cent - the first time for a year that the measure has been in single digits.

But despite property prices now being only 0.2 per cent lower than they were at the beginning of the year, the group warned that the recent improvement was unlikely to mark the beginning of a sustained recovery.

It said that while the rises seen since March were likely to be more than just "statistical noise", they were taking place against a backdrop of very low activity. The number of mortgages being approved for house purchase is still 55 per cent below its long-term average despite recent rises, and at a level which is usually associated with falling prices.

Martin Gahbauer, Nationwide's Chief Economist, said, "While it is encouraging to see that prices are no longer seeing steep falls, there are still many obstacles in the way of a genuine and sustainable price recovery.

"To begin with, abnormally low supply levels are unlikely to last forever, as the recent price increases should make previously hesitant sellers feel more confident about marketing their properties."