Nationwide’s January report suggests that house prices rose by 0.4 per cent. As a result the annual rate of house price inflation eased slightly to 12.6 per cent from 12.7 per cent in December. The price of a typical house stands at £152,757.
Alex Bannister, Nationwide’s group economist, said while the introduction of mortgage regulation may have temporarily depressed activity, only 77,000 house purchase mortgages were approved in November, the lowest since September 1995. He expected activity levels to return to around 90,000-100,000 cases per month in the coming months.
Bannister said: “While increased confidence about the outlook will bring buyers back to the market, they will be more price-conscious than in recent years.
“Higher activity levels and improving sentiment should help underpin current property valuations but they are unlikely to reignite rapid house price inflation.” Russell Jervis, managing director of haart estate agents, was more encouraged. He said: “Data from across our network confirms that there’s a more positive attitude in the housing market at the moment.
“Interest rates and high prices caused a lot of pent-up frustration for homebuyers during last year but successive price falls during the second half of 2004 mean that there are now some very attractively priced properties out there.
“Applicant levels are now at their highest point since July 2004.” The Hometrack January survey is less optimistic reporting a fall of –0.4 per cent for January, the seventh consecutive month that house prices have fallen.
John Wriglesworth, Hometrack’s housing economist, said: “The start of 2005 hasn’t brought much good news on the housing market front. We are yet to see signs of improvement.
“House price decreases h ave been less than previous months but it isn’t until June that we are likely to see a recovery with house prices moving upwards.”
