Residential property prices in the UK have recovered to the same level as a year ago after the fifth monthly rise in a row, according to the latest figures to be published by the Nationwide Building Society.
Nationwide, one of the country’s biggest property lenders, said that prices rose by 0.9% in September compared with August bringing the average price of a home equal to what it was in September 2008.
Nationwide said the price rises suggested that the worst of the recession was over for the property market but it also warned that the rate of price increases may now slow and lack of finance is still holding back the recovery.
‘The further increase in house prices is very much consistent with improvements in a broad range of economic and financial indicators over the last few months, all of which suggest that the most intense phase of the recession and financial crisis have probably passed,’ said the Nationwide’s chief economist Martin Gahbauer.
‘However, given that the housing market still faces considerable headwinds in the form of high unemployment, restrictive credit conditions and an impending withdrawal of the stamp duty holiday, it would be surprising to see house prices continuing to increase at the very strong rate seen in recent months,’ he added.
He said at the current rate at which mortgage approvals for house purchase were rising, it would take another 18 months for sales volumes to recover to their pre-downturn level.
While prospective first-time buyers have been helped by continuing low mortgage interest rates, lenders have been criticised for demanding large deposits, which are still preventing many from getting on the housing ladder.
Another positive aspect to the figures is that all regions of the UK saw house price rises during the third quarter of the year, compared with the previous three months. Northern Ireland saw the biggest quarter-on-quarter change at 9.7%, followed by the South West at 4.9% and the outer Metropolitan region of London at 4.7%, while in the outer South East prices were 4.1% higher.