| U.K. Home Prices Rise for Fifth Month in September |
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02/10/2009 13:14 (49 Day 23:20 minutes ago) | |||||
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The FINANCIAL -- U.K. home prices rose for a fifth month in September, and are now back to the same level as this time last year, according to the Nationwide Building Society.
Nationwide's latest snapshot of the housing market revealed that prices were up 0.9% over the month, bringing the annual rate of inflation to 0%, Guardian reported. Nationwide said the average price of a property in the UK was now £161,816, up from £160,224 in August. The figures represent a remarkable turnaround from earlier in the year, when prices appeared to be in freefall.
The average price is now just under £14,000 higher than in February, when it dipped to a low of £147,746, while the annual rate of change has moved out of negative territory for the first time since March 2008, according to the same source. The three-month trend – which generally offers a better indicator of underlying trends than monthly figures – rose from 3.3% in August to 3.8% in September, its highest level since August 2004.
The report adds to signs that Britain is pulling out of its worst economic slump in at least a generation as consumer confidence improves and mortgage approvals pick up, Bloomberg informs. The International Monetary Fund yesterday raised its forecast for U.K. economic growth next year, saying the housing market is now stabilizing.
“The most intense phase of the recession and financial crisis has probably passed,” Martin Gahbauer, chief economist at Nationwide, said in a statement, according to the same source. “The further increase in house prices is very much consistent with improvements in a broad range of economic and financial indicators.” The number of houses being sold is still below normal and will probably take another 18 months to return to the level before the financial crisis, the report said.
The Nationwide calculates that housing turnover - the percentage of private sector housing stock changing hands on an annualised basis - now stands at almost 4%, BBC wrote. This is still significantly lower than the rate of between 7% and 8% recorded before the downturn in the housing market.
David Smith, of property consultancy Carter Jonas, said anyone hoping to sell now had a "window of opportunity" that might soon shut, the same source reported. "We have to expect more turbulence ahead, specifically as a result of rising unemployment and interest rates," he said. "This toxic combination will bring more property on to the market as people struggle to meet their repayments, which will apply downward pressure on prices and potentially reverse the recent trend, at least for a time," he added.
Nationwide's regional figures for the third quarter of the year showed that all regions of the UK saw house price rise compared with the previous three months, according to Guardian. Northern Ireland saw the biggest quarter-on-quarter change – 9.7% – followed by the south-west of England at 4.9% and the outer Metropolitan region of London at 4.7%.
Prices were 4.1% higher in the outer south-east, but the average price growth in Wales was only 0.1% during the third quarter, the same source informs. On an annual basis, house prices in Scotland are now only 1% lower than they were a year ago, but they are 8% down in Northern Ireland.
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