Opinion divided on housing recovery
House prices stagnated over the summer and dipped last month and buyers remain cautious due to the imminent public sector cuts and the knock-on consequences for the economy.
Debate still rages as to which way house prices are headed: in September, Halifax reported a fall of 3.6%, while Acadametrics said there was a 0.2% increase and Halifax said there was a 0.1% increase. But experts and lenders agree that any house price growth is sluggish.
According to Nationwide these market trends remain consistent with an unwinding of the supply-demand imbalance that drove prices up last year.
It warns that unless prices recover strongly in the autumn, the three-month rate of change will turn negative next month.
Meanwhile, Acadametrics reports that London was the area to experience the greatest amount of movement, while sales remained sluggish in every other region.
Year-on-year house price growth has slowed to 7.7% and this is expected to slow further towards the end of 2010.
David Brown, commercial director of LSL Property Services, says lending has been broadly flat and house prices have stalled, with neither likely to improve until 'positive economic news' helps lending conditions.
"In the short term we expect small fluctuations but no significant dip in the wider market. The current exception is London where high demand for prized property from cash-rich buyers has seen housing market activity increase," he adds.
Martin Ellis, housing economist at Halifax, says: "Prices are now at a very similar level to that at the end of last year.
"We expect UK house prices to remain static overall in 2010." However, Stuart Law, chief executive of Assetz, predicts modest 5% overall growth for 2010.
The indices provide different statistics because they are measured at different points in the house buying process, and some cover the whole of the UK while others just cover certain parts.
This article was originally published in Money Observer - Moneywise's sister publication - in October 2010