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Spring house price rise leads experts to say worst is over
Jonathan Prynn, Consumer Business Editor1 Jun 2009
A spring bounce in the property market has pushed the average London house price back over the £300,000 mark.
A 1.4 per cent rise in April spurred the average price for a home to £302,411.
Today's official Land Registry figures will be closely monitored by those watching for property green shoots as, unlike other surveys, they cover all transactions.
Nicholas Leeming, director of propertyfinder.com, said: "London often leads the way so good news in the capital is good news for everyone. Confidence in the housing market is at its highest since the credit crunch began and, although the road to recovery may be long, it seems the worst is behind us."
It is the first time the average price has been over £300,000 since January and the highest monthly rise since August 2007, although values are still down 14.3 per cent in a year. Prices in London peaked at £356,257 in January last year. The biggest monthly rises were in the eastern boroughs of Newham (3.2 per cent) and Hackney (2.8 per cent) which are less likely to be affected by the City downturn.
Property experts urged caution because a 60 per cent collapse in the number of sales means monthly figures could be more volatile than previously.
But a survey from estate agency Knight Frank agreed, showing that prices in central London rose 1.6 per cent last month. Most sales are in the £1million to £3million range - mainly two bedroom flats or medium-sized family houses.
Liam Bailey, Knight Frank's head of residential research, said: "The sealed bid system is being used again for the first time in 18 months."
David Smith, senior partner at property consultancy Carter Jonas, said: "There is greater confidence, more mortgages are being made available and mortgage rates can't go lower. Knowing that, people are more prepared to step out into the market place, especially at the lower end. There is definitely a more vibrant first-time buyer market, which is key because it's been absolutely sterile.
"We have just sold a one- bedroom flat in Wimpole Street after 30 viewings in 24 hours and the guide price of £675,000 was achieved." He said the property could have fetched £800,000 in 2007.
Peter Rollings, managing director of estate agency Marsh & Parsons, said: "This is the bottom for house prices - especially in London. The Land Registry is the most reliable index. We're not going to see prices recover quickly, and growth will keep flitting up and down a bit, but we're bumping along the bottom of the market and will do so until the end of the year."
Reader views (7)
Hilarious. Good that the Standard take the time to listen to all those dropouts (sorry, "property experts") that got one GCSE in metalwork and became an estate agent because they could't do anything else. It has been said before, but I'll say it again, why are rising property prices a good thing? Think about it.
- Jim, London, 02/06/2009 08:57
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The country is bust. The banks are bust. Many people are dangerously in debt. The government is irresponsibly borrowing and spending to try to win the election. Soon the bill will arrive. That flat in Wimpole St will next sell for under £ 400,000. Just because it is comic to say we are all doomed does not mean it is not true. Estate agents will say anything: they don't care they just want a sale.
- Brendan, London, UK, 02/06/2009 01:10
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Blip.
How can a country that's bankrupt with a soon-to-be 3 million on the dole have increasing property prices?
No one is lending and a tiny amount of houses are selling to those silly enough to lose their hard-saved deposit when prices properly correct.
The only people that agree things are improving are those that make money from more sales. They are ramping it up again; DON'T fall into their trap!
How rising price can be described as good news is beyond me. Affordable property is still out of reach or most.
The country is broke, jobs are disappearing and banks aren't lending. Work it out...
- Peter, London, 01/06/2009 19:02
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"Most sales are in the £1million to £3million range - mainly two bedroom flats or medium-sized family houses"....I'll have two please...
It's in the interest of estate agents as it is with any salesperson to make out that everything is better than it is..otherwise they'll never make a sale. Greedy estate agents and developers are as much to blame for property prices going through the roof and they will do or say anything to try and make a sale as they have been hit hard...well tough, we've all been hit hard. Every day we read about more redundancies and even the increase in repossessions. The predictions change with the weather so I never trust anything I read especially when it's come from an estate agent.
Even if the market does pick up, who exactly is going to buy the property?
- Alan, East London, 01/06/2009 16:53
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Um, haven't the estate agents been saying this since Christmas?
- Bob, Cheam, 01/06/2009 16:43
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So a bunch of estate agents (sorry, "experts") say that it's a good time to buy houses. Who am I to argue? I'll have one of those cheap 1 million 2-bed flats, please.
- George, London UK, 01/06/2009 15:22
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So the managing director of estate agency Marsh & Parsons, said: "This is the bottom for house prices - especially in London" But then he says "growth will keep flitting up and down a bit, but we're bumping along the bottom of the market and will do so until the end of the year."
Typical estate agent! Price increases cannot be sustained, jobs are being lost, the economy is shrinking...
- Louisa, london, 01/06/2009 15:16
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