House prices rising again! 25.06.2009

Author: Simon Whittaker Posted on: 25 June 2009

Can house prices really be on the rise again?  Well if you look at the Halifax index - this fell 1.8% in April but rose by 2.6% in May (both on a seasonally adjusted basis that will have depressed the true increase).  Nationwide's figures are equally strong having fallen by 0.3% in April they rose by 1.2% in May - and if you work on true prices rather than seasonally adjusted prices then they rose in each of March, April and May, registering an overall increase of 4.24% over the three months!

Other indices may not agree with Nationwide and Halifax but all appear to indicate that at the very least price drops are abating rapidly.  I believe that there will be convergence of the main transaction indices in the third quarter - and this will be at around the static price mark - and then in the final quarter we will see modest growth in most of the indices.

Reading other articles in these blogs you will be aware that the cost of 5 year money is increasing steadily - and we foresee this continuing with the obvious result that fixed rates for both residential mortgages and for buy to let mortgages will become increasingly expensive.  Our conclusion therefore is that, balancing both the likely moves in property prices and in fixed rate mortgages, the cost of buying property is likely to continue to rise steadily over the rest of the year.

Author: Simon Whittaker