House Price Update to 6 October 2010

UK House Prices Situation: Stagnation in many areas

UK House Prices Forecast: No major changes expected in near future

September an "Uneventful Month" For Housing Market

Average UK house prices changed by just 0.1% in September, according to the latest house price index from mortgage lenders Nationwide. In real terms, this means that nothing much happened at all – although there may have been some regional pockets where prices rose or fell a little more than this.

The monthly 0.1% rise leaves the annual rate of change at 3.1% - down from 3.9% in August and 6.6% in July. The long-term nature of home ownership and the slow pace at which sales take place means that annual rate of change is probably a more meaningful indicator of what is happening to the housing market. Month-to-month changes can cancel each other out and be insignificant when looked at over a whole year.

Commenting on the results, Nationwide Chief Economist Martin Gahbauer said that "buyers appear to have a slightly better hand than sellers at the moment". Gahbauer said that the direction taken by house prices in the near future would depend on "the extent to which existing sellers are willing to compromise on their asking price in order to make a quicker sale".

Gahbauer observed that the three month rate of change has turned negative this month – at -0.9% - but remains considerably above the level of -5.5% seen in 2008 and is not necessarily a warning of bigger price falls to come. Whether this happens or not may depend on the number of speculative sellers on the market versus the number of sellers who need to sell, according to Gahbauer, who said that if "most of the new sellers in the market are keen to sell more quickly, then the recent downward trend in prices may continue."

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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