The UK’s housing market could be showing the first tentative signs of recovery, after the latest figures from Nationwide’s House Price Index revealed that property prices across England and Wales rose by 0.6% in October.
The increase reverses the downward trend recorded in recent months, and may go some way to negating the fall of 0.4% recorded in September.
The lift in house prices last month brings the average cost of a home in the UK to £164,153, up from a figure of £163,964 in September.
Robert Gardner, Nationwide’s Chief Economist, argued that while monthly changes in house prices failed to established either an upward or downward trend in the market, the picture is more stable year-on-year.
“The annual pace of change continues to display a picture of relative stability, with house prices down just 0.9% compared to October 2011,” he said.
“This maintains the pattern that has been evident since late 2010, with annual price growth remaining in a narrow band between +1.5% and -1.5% on all but two occasions over the past two years.”
Gardner goes on to say that the housing market will take time to gather pace, with wage growth still failing to keep up with the cost of living, and unemployment still below normal levels.
However, he argues that the housing market could go on to gain momentum as a result of the government’s Funding for Lending scheme, although it will continue to be subdued until the economy makes a more significant recovery.
“Policy measures such as the Bank of England’s Funding for Lending Scheme, which is helping to keep down mortgage rates, should provide support for mortgage lending,” he said.
“Nevertheless, housing market conditions are likely to remain fairly subdued until there is a sustained improvement in the wider economic environment.”