Green shoots of recovery in the housing market?

House Prices

The latest house price survey from the Halifax has showed that house prices rose by 0.3% in July.

In a possible sign that house prices may have stabilised and even started to rise, albeit modestly, the Halifax also reported that prices were up on a quarter to quarter basis for the first time in 14 months.

However according to the survey prices are still 2.6% lower than this time last year, with the average house in the UK worth £163,981.

Martin Ellis, housing economist for the Halifax, said: “Overall, there has been little change in either the level of house sales or the number of properties on the market for sale since late 2010.”

He continued: “These steady market conditions have helped to stabilise house prices in 2011 following last year’s modest decline.

“This pattern is expected to continue over the rest of the year with little genuine direction in either house prices or sales.”

However some experts believe that house prices will start to fall. Howard Archer, chief economist at IHS Global Insight, for example believes that prices will fall from current levels by around 5% by mid 2012.

Mr Archer’s view is that pressure on disposable incomes, wide spread spending cuts, and concerns over the general economic outlook and job security are outweighing the effects of low interest rates and will push prices down over the coming months.