Property monitor: When will house prices stop falling?
The property bureau at Myfinances reviews the state of the property market for the first quarter of 2009, and looks at the most recent forecasts for the rest of the year.
The property market is now in its second year of price falls and the government has introduced measures to support homeowners in an attempt to stimulate the economy.
Have any of these initiatives, such as suspending stamp duty for properties under £175,000, helped the market?
Hometrack HPI
Q1 2009: House prices falls steadily decline.
Property market analysts Hometrack survey estate agents on a monthly basis to get a national picture of house prices.
January's monthly house price fall of one per cent gradually declined to a drop of just 0.3 per cent by April - the lowest monthly decline for a year.
The slowdown in the fall in house prices reflects growing optimism among estate agents, Hometrack says.
But the firm has a note of warning.
"While the pick up in demand and sales is real, the volume of transactions is set to be less than half the level that would constitute 'normal' market conditions.
"Buyers of family housing at low loan to values (LTV) together with cash investors have been behind the improved sales figures of recent months, but the market cannot operate indefinitely with just one sub-set of active buyers.
"First-time buyers must be factored into the equation and the fact remains that the majority of these remain affordability constrained and unable to access mortgage finance.
"A broad based sustainable recovery in the housing market needs to be supported by a broad base of buyers," said Richard Donnell, Hometrack's director of research.
Halifax HPI
Q1 2009: House price falls in first quarter lowest for a year.
Britain's biggest mortgage lender Halifax releases figures monthly based on its own lending.
House prices nationally declined by 2.7 per cent in the first three months of 2009, the smallest quarterly fall since the first quarter of 2008 (-1.4 per cent) "tentatively indicating that the trend rate of decline may be beginning to stabilise."
The previous three quarters have all recorded falls of between five and six per cent, Halifax says.
Buyers are starting to show interest in the market once again as house prices fall to a more affordable level. However, the bank warns there are still bumps in the road ahead for the sector.
Martin Ellis, housing economist for Halifax, says: "Conditions in the housing market are likely to be tough during the remainder of 2009 despite the improvements in affordability.
"Increasing unemployment, low consumer confidence and the constraining effects of the continuing dislocation of the financial markets on the availability of mortgage finance are all likely to exert downward pressure on the market over the coming months."
Nationwide HPI
Q1 2009: Property prices slip by 4.2 per cent over three months.
Nationwide, the UK's third-largest mortgage lender, releases figures monthly based on its own lending.
House prices fell 4.2 per cent in the first three months of the year to £149,709, Nationwide says.
The building society is less optimistic than Halifax, and although also notes the fall is less severe than previous quarters, adds this should no be taken as an upturn in the market.
Fionnuala Earley, Nationwide's chief economist, says: "There was some moderation in the rate of seasonally adjusted quarterly fall during the quarter from 4.7 per cent to 4.2 per cent, but given the weakening economic and labour market background, this is unlikely to be a signal of a very significant change in the direction of house prices in the short term."
Land Registry
2008: Property price falls moderate over quarter.
The government's Land Registry index bases its data on completed sales and is the largest survey in the UK. It is the most accurate but not as up to date as other surveys.
Monthly house prices in England and Wales fell by 0.8 per cent in January, two per cent in February and 0.4 per cent in March, according to the latest figures from Land Registry. The average house price in England and Wales in March is
£152,895 and prices are now back to August 2004 levels.
"While prices are still falling, the speed of the fall appears to be slowing," the Land Registry says.
Rightmove HPI
Q1 2009: Asking prices rose in a 'spring bounce'.
Property portal Rightmove measures asking prices for homes in the UK. This is the earliest report for house prices, but does not generate the same interest as the Halifax and Nationwide surveys as it does not record selling prices, which are often very different.
Rightmove said house sellers raised their prices in March as spring arrives.
While house prices fell 1.9 per cent in January, prices crept up again by 1.2 per cent in February and 0.9 per cent in March.
Miles Shipside, commercial director at Rightmove, says: "We are seeing a big jump in enquires, looking for those best buys.
However, he adds: "Until banks get their own houses in order, the active minority of sellers and agents who have drastically adjusted pricing will remain frustrated by the limited functioning of the financial services sector."
Rics housing market survey
Q1 2009: New buyer enquiries continue to rise during the first three months.
The Royal Institution of Chartered Surveyors (Rics) reports monthly on data collected from its members, who value homes all over the UK.
New buyer enquiries rise for the fifth consecutive month leading to an increase in both newly agreed sales and sales expectations, Rics says in March.
The seasonally adjusted net balance of surveyors reporting falling rather than rising prices recorded a modest improvement in March but at 73.1, it remains deeply in negative territory.
"The latest reading was, however, the best outcome since February 2008," Rics says.
Myfinances outlook
Buyer interest is rising, and price falls finally appear to be slowing. But property experts are waiting for mortgage lenders to loosen their criteria and agree more loans before announcing the bottom of the market.
Economists are now expecting the housing market to continue to fall, at a slowing rate, until the end of the year and into 2010. After it starts to turn, the market is expected to stagnate for some time before rising quickly again, as the lack of supply caused by the building industry recession forces a sharp rise in prices.
However, buyers should not be put off too much by a falling market, as they can always make an offer, while sellers should be looking to shift their home as fast as possible, according to experts.
Sarah Routledge
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