June 9, 2009
House Prices On The Up
More tentative signs of a housing recovery this week as Nationwide revealed house prices rose by 1.2% in May – but is it worth getting excited about?
According to its monthly price index, house prices rose by 1.2%, to an average of £154,016. And although this rise means some people will have had thousands added to the price of their home, it's worth bearing in mind that this is still 11.3% down on last year's figures.
Martin Gahbauer, Nationwide's chief economist, says: “Although the short-term trend in house prices has clearly improved from where it was at the beginning of the year, it is still too early to say that the market is turning definitively. During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again in subsequent periods.
"In the current downturn, the combination of rapidly rising unemployment and tight access to credit implies that the last of the price declines has probably not been seen yet. Nonetheless, the improvement in house price trends is consistent with signs of stabilisation in several other economic indicators and suggests that any further price declines may occur at a less rapid pace than in 2008."
Nationwide says the rise may be down to the lack of housing stock in the UK – the less houses there are, the more demand there is for them and the higher the average house price. So although it might feel good to know your home is worth a little more than it was in April, you may find it tough to seek out a new property if you were thinking of moving up the ladder.
Ultimately these figures do not mean much; every house is different, every area is different and every street is different. The best thing to do is to talk to a financial adviser about having all your assets valued and assessed. Then you can see what you have, what mortgage you could be offered and what your chances are in moving onwards and upwards in this difficult time.
SOURCE: Nationwide, 29/05/09
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