house prices rose in May after three successive monthly falls, according to a leading indicator, but experts warned it was too early to start talking of a recovery in the market.
The Halifax House Price Index rose 2.6 per cent last month compared to April, taking the value of an average home to £158,565. It was the first monthly rise in both the Halifax and Nationwide house price indices since August 2007. Nitesh Patel, housing economist at Halifax, said: "There are some tentative indications of a possible stabilisation in activity, albeit at a low level."
May was only the third rise in the Halifax index in almost two years. Simon Rubinsohn, the chief economist at the Royal Institution of Chartered Surveyors, said: "The previous two gains were quickly reversed but this move appears to have more legs," but warned: "It is too early to say that house prices have now bottomed out." Mr Patel said it was important not to put too much weight on one month's figures, especially as prices are 16.3 per cent down on the year. Between 1991 and 1992, house prices fell 11 per cent, with five months of rises.
Peter Bolton King, of the National Association of Estate Agents, said it was one more sign "pent-up demand in the housing market is beginning to move."