House prices rise 1.2%
- 00:01:44
- ITN
House prices rise 1.2%
House prices rose 1.2 per cent during May as buyers continued to return to the market, figures from Nationwide have shown. The cost of property also increased by 1 per cent in March, while a fall of just 0.3 per cent was recorded in April, according to the building society. The latest jump pushed average prices up to £154,016, and caused the annual rate at which property values are falling to slow sharply from 15 per cent to 11.3 per cent. However, Nationwide said the recent improvement is likely to have been caused by a shortage of homes on the market, due to a combination of lower building levels and sellers either delaying putting their home on the market, or opting to rent it out instead. At the same time, estate agents have been reporting an influx of potential buyers as historically low interest rates and recent house price falls tempt people back into the market. Chief economist Martin Gahbauer said the figures suggest further price declines may occur but at a less rapid pace than in 2008. Mr Gahbauer continued: "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." There has been a raft of positive data on the housing market in recent weeks, with both transaction levels and mortgage approvals for house purchase increasing. But the Council of Mortgage Lenders reported a 9 per cent fall in mortgage advances during April, prompting economists to warn that any recovery was likely to be gradual.
ITN | May 29, 2009
