Current UK House Prices Situation: Price falls slowing but continuing

UK House Prices Forecast: Further drops likely, bottoming out late 2009

No Good News, But Some Less Bad News

The publication of Nationwide's latest house price index caused momentary excitement in the media as it showed that average house prices rose by 0.9% in April.

However, you should remember that we have seen this phenomenon before - with Halifax in February, when it reported a rise and Nationwide a fall. In both cases, the mortgage lenders' own representatives were the first to say that one small increase does not constitute a change in market direction.

Commenting on this month's figures, Nationwide's chief economist, Fionnuala Earley, said that "while the rise in prices in April is welcome, it is far too soon to see this as evidence that the trough of the market has been reached."

The actual figures from the Halifax and Nationwide for April were:

Nationwide: +0.9% (monthly)
-15.7% (yearly)

Halifax: -1.9% (monthly)
-17.5% (yearly)

Rightmove Highlights Disconnect Between Reality & Sellers

The apparent unwillingness (or inability) of potential sellers to respond to market conditions is one reason that sale volumes are still so low, according to property website Rightmove, which lists around 90% of houses for sale in the UK.

Rightmove's feedback from estate agents suggests that houses are selling at around 25% below peak prices. In contrast with this trend, Rightmove recorded another increase in asking prices in April - despite evidence that houses are not selling at these prices.

Rightmove's Commercial Director Miles Shipside says "Some sellers are still pricing wishfully high" but says that further problems for would-be buyers and sellers are being caused by the banking industry, which is still suffering from "limited functioning".

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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