Disputes Over Market Recovery

Latest Nationwide Building Society's price index shows an increase in UK property prices. An average house is now priced at £150,946 in March, which is 0.9% more than in February. However, Halifax data suggests that property prices fell by 1.9% in March. We publish the opinions of leading commentators. Chief economist at Nationwide, Fionnuala Earley Fionnuala Earley believes that although the Bank of England have already taken special measures, such as rate cuts and the quantitative easing program, the new figures cannot be taken for market recovery. The measure of the Government and the Bank will take time before they enter into effect. Although the sales-to stock ratio has improved, it is too early to talk about increased consumer confidence and sustained house prices, as the ratio remains at very low levels. Current positive trend can be best explained by the return of buyers who waited for the prices and interest rates to go down before they purchase a house. Property economist at Capitaleconomics, Seema Shah Seema Shah says that 1 month’s increase in prices in not very revealing and that is why it is too early to speak about positive trends on the property market. Moreover, according to Shah, experience of the 1990’s crunch shows that any temporary increase can signal a downward trend. Market activity levels are also far from impressing, when looked at in context. In general, Shah says that the condition of the UK is so dreadful that it will not envisage the recovery in 2009. Chief economist at RICS, Simon Rubinsohn Recent news reflects improvements that are contained in RICS monthly Housing Market survey. An increased level of buyer enquires, mortgage approvals, house prices, etc. demonstrate that the housing market can be now on its way to normality. However, current activity is way down on anything that was experienced during previous market recessions. Major issues that now constitute a problem are the rising level of unemployment along with low mortgage accessibility for first-time buyers.