House prices back at 2008 levels

Published: Fri, 02 Oct 2009 13:30:00

House prices in the UK are now at the same level as September 2008, after they rose 0.9 per cent for the month.

Figures out today showed the fifth consecutive monthly rise in house prices, with the average price of home in the UK now at £161,816. But Nationwide, which released the figures in their monthly house price index (HPI), said the high supply of rental property raised questions about the "durability of price recovery". Martin Gahbauer, Nationwide's chief economist, said: "The further increase in house prices is very much consistent with improvements in a broad range of economic and financial indicators over the last few months, all of which suggest that the most intense phase of the recession and financial crisis has probably passed.

"However, given that the housing market still faces considerable headwinds in the form of high unemployment, restrictive credit conditions and an impending withdrawal of the stamp duty holiday, it would be surprising to see house prices continuing to increase at the very strong rate seen in recent months." On a quarterly basis, house prices in all regions rose during the third quarter of 2009, according to today's HPI. Nationwide found southern regions saw stronger growth than those in the north, and prices in Northern Ireland increased for the first time in two years.

David Smith, senior partner at property consultancy Carter Jonas, said: "For anyone considering selling their home, now is the time to do so. It is a window of opportunity that may soon shut.

"We are in the eye of the storm, at present. Yes, house prices are rising, due to a combination of low supply and more positive news generally emerging from the economy, and yes we are almost certainly past the worst, but we have to expect more turbulence ahead, specifically as a result of rising unemployment and interest rates."

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