Nationwide announced today (29 May) that house prices have risen by 1.2 per cent, which is the strongest monthly gain for 19 months, according to a report from Times Online. This is despite the analysts forecasts of a fall of 1 per cent in May and offsets the 0.3 per cent decline that happened in April.
Despite the positive sign, which resulted the average British house price jumping to ?154,016, the prices still remain 11.3 per cent lower than they were a year ago.
Although Nationwide still said unemployment is set to continue to rise and the recession is still affecting many consumers, there is some cause for good cheer. According to Martin Gahbauer, Nationwide?s chief economist: ?The improvement in house price trends is consistent with signs of stabilisation in several other economic indicators and suggests that any further price declines may occur at a less rapid pace than in 2008.?
Suren Thiru, a housing economist for Halifax, said it was a good sign but the housing market was not in the clear yet: ?We have certainly seen price stabilisation in recent months, but the outlook remains challenging for the rest of the year because unemployment is rising, consumer confidence is low and credit remains scarce.?
Howard Archer, chief economist for IHS Global Insight, stated that Nationwide?s figures ?will obviously fuel speculation that the housing market may be turning?. ?However, we remain highly sceptical that house prices have bottomed out,? Mr Archer added. ?It should also be noted that the Nationwide house price data has recently contrasted somewhat with that of the Halifax.?
