Fresh signs of housing revival

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The Independent Online

Signs that the decline in the housing market may finally be coming to an end look set to be confirmed today by fresh figures showing a significant rise in property prices last month.

Nationwide Building Society's house price index, published today, is believed to show that the cost of homes rose substantially in November.

Although prices are still lower than 12 months ago, November's rise is likely to be seen as reinforcing the upward pattern established since the end of summer. Nationwide's statistics will come on the same day as official figures from the Bank of England on housing transaction numbers for October.

Ian Shepherdson, UK economist at HSBC Greenwell, said: "I believe they will show an increase in transactions. Many people thought they would fall because of the changes that month in eligibility for benefits when people lost their jobs. This will be on top of rising figures for earlier months. Overall, the quarterly increase will be very substantial compared to the previous three months. "

His comments followed the decision by most big lenders, including Halifax, Nationwide, Britannia, Abbey National, Northern Rock and Bradford & Bingley, to cut the cost of home loans by up to 0.4 per cent.

Mr Shepherdson said: "Building societies are behaving as any company ought when faced with a collapse in sales - cut prices. It is hard to see this as anything other than a very powerful signal to the housing market."