House prices in England and Wales rose in June for the first time in 18 months, official figures revealed yesterday in further evidence that the housing market may finally be bottoming out.
The Land Registry, which logs the value of all completed housing transactions in England and Wales and thus provides the most accurate data on prices, said the market was up by 0.1 per cent in June compared to May, the first positive month since January 2008.
However, the Land Registry warned that there continued to be big regional variations in pricing trends and said it believed the market was levelling off rather than launching a recovery. The value of the typical home was 14 per cent down in June compared with the same month a year earlier, it added.
"This is the first time in well over a year that the monthly change has been positive," the Land Registry said. "However, as the monthly increase is only 0.1 per cent, the movement does not signal a return to solid growth, but rather flattening prices."
Five regions of England and Wales saw house price gains in June – London, the West Midlands, the South-west, the South-east and the East – while prices in the rest of England and Wales – the North-east, the North-west, the East Midlands, Wales and Yorkshire and the Humber – fell.
The Land Registry also warned that housing transactions remained very sharply down compared to activity before the slump.
Nick Hopkinson, a director of Property Portfolio Rescue, said: "The data highlights that the UK market has virtually ground to a halt – house sales volumes are down 75 per cent on the summer average sales over the last decade and are even 50 per cent down on last summer. If current sales trends continue most people will only be moving house once every 30 years."
While the Land Registry data reinforces reports from other housing market analysts such as Nationwide Building Society and Halifax Bank, both of which have also reported small house price gains in recent months, economists remain cautions amid a continued decline in the amount of mortgage funding available, as well as factors such as rising unemployment and financial uncertainty.
"We remain far from convinced that house prices have bottomed out," said Howard Archer, chief European and UK economist at IHS Global Insight.
"Housing market activity still remains at a level consistent with falling prices. We suspect that housing market activity is likely to remain muted compared to long-term norms for some time to come."Reuse content