Commenting on the Nationwide house price index, which rose by a seasonally adjusted 0.9% in September, leaving prices virtually unchanged when compared to September 2008 and about 7% higher than the recent trough in February 2009, Brigid O'Leary, RICS senior economist says.
"Just as house prices fell very quickly at the start of the downturn, the recent turnaround has been surprisingly strong. The quarterly change (an indicator of the underlying recent trend) now stands at 3.8%, the highest since August 2004. Significantly, the regional breakdown shows that house prices actually rose in all regions, by an average of 3.7%, between Q2 and Q3 of this year.
"However, the recent trend in increasing house prices has been supported by very low levels of stock on the market. An increase in property for sale would improve transaction levels but could also put some renewed downward pressure on house prices. As restricted levels of activity won't ease entirely over the next couple of months some upward price pressure will remain. This means house prices are still expensive compared to average earnings, and with lower loan-to-value ratios now more the norm in mortgage lending, first time buyers may struggle to produce an adequate deposit.
"Looking ahead, high, and still rising, unemployment plus any future increases in mortgage interest rates will weigh on the outlook for house prices over the next 12 to 18 months."
Related links
- 30/09/2009 17:02 - Central London experiencing busy property sales
- 30/09/2009 10:46 - England will need 2.7m more homes by 2031
- 30/09/2009 10:13 - Edinburgh sees demand for rental properties
- 29/09/2009 08:59 - Tenancies getting shorter
