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Nationwide report that house prices are now back to 2008 levels

26/01/10

House prices in the UK are now at the same level as September 2008, after they rose 0.9 per cent in October 2009


Figures out for October 2009 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 (Q3) 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.

National Association of Estate Agents (NAEA) chief executive Peter Bolton King said: "Further evidence that the housing market is recovering should be welcomed and these figures back up what NAEA members are telling us. However recovery is a fragile process and not guaranteed.

"Househunters need access to mortgages from the major lenders. The Government's flawed stamp duty policy also needs re-examining, otherwise these positive signs risk being short-lived."