House Prices Rise for the First Time
House prices rose by 1.9 per cent last month after ten consecutive months of price falls. The unexpected rise in house prices more than made up for December’s 1.6 per cent fall and leaves the average home costing £163,966, according to Halifax. The housing market rally comes as the Bank of England slashed interest rates by a further 0.5% today to a new historic low of 1%. Since October, rates have been slashed four times in four months to 1.5 per cent, the lowest level since it was founded in 1694.
Martin Ellis, housing economist at Halifax, sounded a note of caution: “It is always important not to place too much weight on any one month’s figures. Historically, house prices have not moved in the same direction month after month even during a pronounced downturn.
‘There are some very early signs that market activity may be stabilising, albeit at quite a low level.
‘Nonetheless, continuing pressures on incomes, rising unemployment and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to mean that 2009 will be a difficult year for the housing market.’
Recent anecdotal evidence suggests there has been increased activity in the housing market, as steep interest rate cuts, combined with the sharp fall in house prices seen during the past year, tempt potential buyers back.
Today’s figures contrast sharply with a survey by Nationwide last week which showed house prices fell 1.3 percent last month.
Figures from the Bank of England showed that the number of mortgages approved for house purchase rose by 15% in December, although they are still running at less than half of the level they were at a year earlier.
The Royal Institution of Chartered Surveyors has also reported a jump in new buyer inquiries, while a survey carried out by property website Rightmove found that 66% of people think now is a good time to buy a home.
Category: Property News
