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Leaves fall, house prices rise

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House prices seem to be set for a return to their recent form as the doom laden predictions of house price crashes voiced in recent months have been proved untrue, says research from website Propertyfinder.

Both buyers and sellers house price expectations seem to be coming to a happy medium after a summer of mutual antagonism, as sellers drop some of their wilder requests. House price expectations are now split almost down the middle, with 48 per cent predicting a rise and 45 per cent expecting a fall.

Buyer confidence is above the average of the last six months, and both confidence and activity are expected to pick up following the traditional lull of the summer, despite a slight easing of confidence through August.

"The dip in housing market confidence this month which we predicted in July results from negative economic news, such as the rise in oil prices and the weak retail market, and has also been affected by the seasonal slowdown that occurs at the height of summer, when people are on holiday and supremely uninterested in the stress of moving home," Propertyfinder managing director Jim Buckle told This is Money.

Mr Buckle admitted that while the economic repercussions of oil prices have forced the group to downgrade its most optimistic predictions, he remained highly confident of an autumn house price revival.

"With house hunters expecting broad price stability in housing market there is no disincentive for people to move house and with interest rates having peaked, there is no need to fear sharp increases in mortgage costs."

The largest house price increases of the past three months have been seen in the south east, south west and Wales, with Yorkshire, Humberside and the north and north west witnessing the sharpest backsliding on house prices, said additional research by SmartNewHomes.

August saw the seventh consecutive month of house price decreases in London, but the region remains strong in comparison with much of the country, with house prices still high. Three monthly changes, often more indicative of long term market trends, show a possible blossoming of positive house price inflation, however. House prices over the period have been continuously rising by increasing increments through the last seven months and now stand at a 2.1 per cent increase, the highest this year.

This has been boosted this month by the long-awaited decrease in interest rates, said David Bexon, managing director of SmartNewHomes, encouraging those buyers who were sitting on the sidelines to return to the market.

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