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London house prices have recovered to almost the levels they were at a year ago after rising by 3.8% over the last three months.
Nationwide Building Society, which today reported a 0.9% rise in prices across the country in September, said that London prices are now down only 1.9% on a year ago. In some boroughs prices are now actually up on a 12 month basis with Hackney leading the way with a 4% annual rise.
Martin Gahbauer, chief economist at Nationwide, said: “New buyer interest appears to have increased significantly in recent months but the supply of property for sale continues to be very limited, thus helping to support prices in the capital.”
Looking at the national picture, Gahbauer said: “The further increase in house prices is very much consistent with improvements in a broad range of economic and financial indicators over the last few months, all of which suggest that the most intense phase of the recession and financial crisis has probably passed.
“However, given that the housing market still faces considerable headwinds in the form of high unemployment, restrictive credit conditions and an impending withdrawal of the stamp duty holiday, it would be surprising to see house prices continuing to increase at the very strong rate seen in recent months.”
David Smith, senior partner at property consultancy Carter Jonas, agreed: “For anyone considering selling their home, now is the time to do so. It is a window of opportunity that may soon shut.
Rising unemployment and interest rates will bring more property onto the market as people struggle to meet their repayments, which will apply downward pressure on prices.”
In London other boroughs where prices are now up on a year ago are Tower Hamlets (3%) and Hammersmith & Fulham (2%).
But many boroughs are still showing double digit falls in prices with Merton at the bottom of the pack with a 15% decline.
Today's data also reveals that almost any Londoner who has stayed in the same house for the last 10 years will have seen it at least double in value.
Londoners are also the most confident people in the country about house prices, according to the Nationwide, with 27% saying prices will rise over the next six months.
The national 0.9% rise in house prices is the fifth consecutive monthly increase.
Reader views (2)
Ross- “The truth is that house prices are still inflated”…. Urm, really? Are you sure? What do you base that on and where in your expert opinion would be the true market value? The thing is, Ross, if that were the case then property would have fallen even further last year than the 25%- 30% slump, but they didn’t… and remember it took pretty unusual circumstances to cause a slump of that magnitude, it wasn’t a natural readjustment in the market. So really the truth is that property at the moment is undervalued and this is a recovery. Lets not forget that a vibrant economy needs a buoyant housing market (and vice versa) so we won’t be out of the woods until prices are back to where they were two or three years ago (somewhere around where they should be). A further slump in house prices (not that there will be one) would be disastrous for the economy.
- Nj, London, 02/10/2009 13:31
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The headline of the main article says, "house prices have recovered to almost the levels they were at a year ago". This is telling as there is a mindset that current house prices are depressed and an increase in prices is a Recovery. The truth is that house prices are still inflated, therefore a "recovery" would be if prices were to decrease to the point they equal the norm. I consider an increase in house prices at this time to not be a recovery. Quite the opposite; it is simply a re-inflation and until headlines say "house prices have re-inflated to almost the levels they were at a year ago", we are always going to have a precarious housing market, upon which too much reliance of the economy is bestowed.
- Ross, London, England, 02/10/2009 12:30
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