Are house prices rising?
There have been a number of reports recently both in the press and on television that house prices may be rising again. Is this true or is it typical of that famous phrase ‘lies, greater lies and statistics’.
It was only six months ago that various forecasters where saying that prices still have another 10 to 20% to fall over the next year. How is it then that the Nationwide and Halifax have both said that prices haven risen for the last three months and the RICS have also reported on behalf of members that prices are rising.
What has truly happened is there has been a shortage of property coming onto the market. The housing market has always ultimately been subject to supply and demand. When there is a good supply and low demand then prices stay static or don’t rise very much and if there is very strong demand and a low supply then prices will rise more forcibly. These are the two fundamental factors although other factors such as the supply of mortgages and confidence and other matters are also affected.
For whatever reason, there has been a shortage of property coming onto the market. This has stopped prices falling the in early part of the summer and now as we move into the autumn statistically prices may be rising. It must be stressed the sort of price rise the Halifax and Nationwide are talking of are less than 1% and in most cases it is difficult for even professional valuers to value a house within 5% of its potential value. What we have seen is in certain very limited areas such as Bournville and terraced houses in Bearwood prices have risen markedly due to the high demand with only a few properties coming onto the market. In many other areas there has been no noticeable price change.
What is important is there is a much improved confidence in the property market and very positive feel which bodes very well for next year.