Both the Halifax and Nationwide price indices have recently seen their first monthly rises since the end of 2007, although both can be taken with a large pinch of salt given the vanishingly small sample sizes that these indices are now based upon.
However the Halifax index for the first quarter of this year also showed the smallest quarter-on-quarter fall in prices since the first quarter of 2008, which is a little more interesting and a possible sign that prices are starting to bottom out.
In addition, February saw mortgage approvals "shoot up" by 20% to 37,000 – but again this is nothing to write home about given a pre-credit crunch monthly average of almost 100,000 per month.
Clearly these data represent the flimsiest of straws to clutch at for the over-optimistic estate agent – but can we expect some real "green shoots" to arrive in the coming months?
The reality is that the housing market is on a knife-edge. Despite the banking bail-outs and the onset of quantitative easing bringing slow but steady improvements, credit conditions will remain relatively tough for some time.
But with base rates at an all-time low, even a relatively modest rise in mortgage approvals to, say, 60,000-70,000 per month may be enough to offset the impact of the meagre wage settlements and rapidly rising unemployment that will continue to unfold over the course of the year, and could lead to house prices bottoming out by the third quarter of this year.
However, Read said he thought it was more likely that mortgage approvals would only tick up slowly – perhaps hitting 50,000 per month by late summer and, with the worsening labour market conditions, prices would continue to slide throughout 2009.
But here’s the (relatively) good news – under these circumstances Read said the CEBR models suggest that prices only had a further 8-10% to fall, and are likely to bottom out by the start of 2010, implying a much slower rate of decline than was seen through 2008.
It is also highly likely that transactions will start to rise over the coming months as a combination of lower prices, low interest rates and slowly improving credit conditions entice buyers back to the market.
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