HOUSE prices rose slightly this month, bringing some evidence of an upturn in the market.
Figures yesterday from the Nationwide Building Society showed prices rose again in May by 1.2 per cent, after a 1 per cent rise in March and a fall of 0.3 per cent in April.
The average house price in the UK – £154,016 – is still lower than it
was a year ago. However, the recent rise means the amount by which property prices have fallen has declined significantly, from 15 per cent to 11.3 per cent.
The quarterly change has also improved from minus 3 per cent in April to minus 0.5 per cent in May and now stands at its highest level since January 2008. However, the Council of Mortgage Lenders reported a 9 per cent fall in advances last month.
A spokesman for the Edinburgh Solicitors Property Centre said the average house price in the capital was stabilising at about £190,000 to £200,000.
He said the ESPC predicted the number of sales for this year will be less than half what it would have been before the crash.
"What we are seeing is that house prices are stabilising from month to month. We don't believe consumers should have concerns about buying a property and then prices taking a dip," he said. "We are still seeing a reduction in potential buyers because of the credit crunch."
Martin Gahbauer, Nationwide's chief economist, said: "Although the short-term trend in house prices has clearly improved from where it was at the beginning of the year, it is still too early to say that the market is turning definitively.
"During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again.
"The combination of rapidly rising unemployment and tight access to credit implies that the last of the price declines has probably not been seen yet."
Housing market analyst Dr Howard Archer said it was too soon to predict an end to the property price slump.
"Housing market activity remains very low by past norms and our expectation is that the pick-up in activity will be gradual and fitful for an extended period, given still very poor economic fundamentals and relatively tight credit.
"It remains very difficult for many people to get mortgages, particularly first-time buyers."
Simon Rubinsohn, Royal Institute of Chartered Surveyors chief economist, was also reluctant to predict the end of the slump. "Even though house prices do appear to be rising in some particularly desirable locations at the present time, it would be premature to assume a more general reversal of the slide in house prices," he said
