The recent rise in house prices may not represent an upward trend

The annual rate of house price decline fell from 15 per cent in April to 11.3 per cent in May, with an average home now costing £154,016, according to figures from Nationwide Building Society.

The stabilisation may have come about for several reasons; with prices so low, sellers have been increasingly holding back from selling or renting out their properties instead of selling and also fewer nwq houses are currently being built, all of which means there are slightly fewer properties on the market.

However, Martin Gahbauer, Nationwide’s chief economist, warned it was too early to be optimistic.  “During the downturn of the early 1990s there were many months during which prices rose, only to fall back down again in subsequent periods,” he said.

“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.”

Rent prices have also fallen in recent months; figures from property website Findaproperty.com suggested that typical rents had remained unchanged in May at £819 a month after nine months of falls.  This may force current landlords to sell, particularly if they have been hit by unemployment or other financial difficulty too, shifting the balance in the market back in favour of buyers.

Estate agents gave the figures a guarded welcome and confirmed that first-time buyer activity had seemed to increase recently, but lending from banks remains at the lowest level in eight years and buyers still need a large deposit.

Andrew Montlake, director of mortgage broker Coreco, said, “First time buyers should not be unduly worried at this point, as there is a good chance prices will fall again slightly in the quieter summer months.  However, anyone seriously considering getting onto the property ladder needs to commit in the next six to nine months or they could well miss the bottom.”

COMMENTS

Online Tax Preparation

2010 01 05

We would like to move into a bigger home. We live in a small condo that we paid a lot for. We will never get as much for it as we owe for our loan, but we have out grown it. We are not in a foreclosure situation because we are making the paymentsOnline Tax Preparation

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