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Property investment prices come out of freezer

18th October 2005 | back to article listings BACK    print this article PRINT

Property price news has finally taken a long anticipated turn for the better, with a slew of well respected organisations saying they have detected tangible if yet small signs of a property price thaw.

Earlier this month, Halifax said that the cost of property had risen by a very respectable 1.8 per cent on the quarter following August's base rate cut to the cost of lending.

This report has been followed with positive indicators issued by the Royal Institute of Chartered Surveyors (RICS) and property website Rightmove, with the latter saying that prices nationwide have increased 0.5 per cent over the past month.

Almost a thousand pounds (£941) was added to the price of the average property during the four weeks up to October 8, with the average home now costing £196,348 after having £3,235 wiped off its value earlier this year, said Rightmove

Average house price inflation edged up to 1.5 per cent from a low of 0.2 per cent in July. "After five years of booming house prices, followed by a year long worry about a crash, we appear to have had a soft landing," said Miles Shipside of Rightmove.

"Now we have touched down at a sustainable level of pricing, buyers and sellers are gaining in confidence." He added that the company anticipated a period of gradual correction as wages gained on house prices before affordability kick started further growth.

The Rightmove report displaying a reduction in the number of new properties coming to market nicely dovetails with a RICS poll of surveyors showing an upswing in demand and new enquiries, suggesting that inflationary pressures will soon come in to play.

The RICS report also showed that Surveyors are predicting price increase by the end of the year for the first time in 18 months, although these are likely to remain modest.

"The upturn in demand and improved outlook on interest rates has led surveyors to predict house price rises for the first time since early 2004, though these are expected to be small," said RICS housing spokesman Ian Perry.

"RICS expects the recovery in activity to be sustained due to continued expansion in employment, which bodes well for a stable housing market," he added.

Prices rose in seven out of ten regions across England and Wales through the course of September with the north seeing the strongest gains of 1.5 per cent, while the south east gained 1.4 per cent.

Houses in greater London stemmed the decline that had taken hold since mid 2004, gaining 0.7 per cent over the month.

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