House prices return to 2008 levelsNo decline in values this year, says Nationwide
02 October 2009
The price of the average home increased 0.9% in September, bringing the annual rate of property price decline to a standstill, according to new figures from the Nationwide Building Society.
September saw house prices rise for a fifth month in a row. This is the first time since March 2008 that the year-on-year rate of change has not been negative.
Nationwide’s data shows the 0.9% increase in property values has brought the price of the average home up to £161,816 from £160,224 in August – a level that is ‘essentially unchanged’ from September 2008.
Further falls possible
Martin Gahbauer, Nationwide’s Chief Economist, 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.’
However, he also warned that the housing market ‘still faces considerable headwinds’ in the form of high unemployment, restrictive credit conditions and the impending withdrawal of the stamp duty holiday.
Mr Gahbauer commented: ‘It would be very surprising to see house prices continuing to increase at the very strong rate seen in recent months.’
Which? property and mortgages expert Cathy Neal says: 'It's crucial to be cautious about relying on statistics like these, as house prices data from different sources often disagrees.
‘Even more importantly, averages such as those used in surveys like Nationwide's rarely reflect regional differences - and in practice, as any homebuyer knows, these have a huge impact on property prices.’
Hints for homebuyers
While it’s tempting to try and predict what will happen to property prices next, Ms Neal advised caution. ‘It's fair to say the rate of house price decline has certainly slowed this year, but it's impossible to be sure that we've reached the bottom of the market,' she said.
‘Rather than trying to predict property price trends, anyone looking to buy a home should concentrate on assessing their own financial circumstances and finding the right mortgage.’
To check current mortgage rates and search for a deal to suit you, use the Which? Mortgage finder. It searches the whole mortgage market and allows you to compare different types of loans, including fixed rate and tracker mortgages.
If you want to see where the market’s lowest rates are at a glance, take a look at the Which? Best mortgage rates tables. Also, don't forget to find out how your chosen mortgage lender fared in our latest Which? mortgage satisfaction survey.
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