House prices only 10% below 2007 peak
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House prices increased by 0.5% in May, making them just 9.5% lower than their peak in 2007, show the latest figures from Nationwide.
The annual rate of house price inflation has dropped from 10.5% to 9.8% and prices are now up 12.2% since their February 2009 trough.
Martin Gahbauer, chief economist at Nationwide, says: “The price of a typical UK property rose by a seasonally adjusted 0.5% month-on-month in May, following a 1.1% increase in April.
“The smoother three month on three month rate of increase rose from 1.1% in April to 1.7%, as February’s fall in house prices dropped out of the most recent three month average.
“The annual rate of house price inflation dropped from 10.5% to 9.8%, which reflects the weaker pace of increase in May 2010 relative to May 2009. Since reaching a trough in February 2009 - following a drop of 19.3% from their October 2007 peak - house prices have risen by 12.2% and are now just 9.5% below the October 2007 peak.”
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Readers' comments (9)
Anonymous | 3 Jun 2010 10:03 am
Now all we need is for valuers to act on this and provide valuations of this order
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Anonymous | 3 Jun 2010 11:08 am
Not in Northern Ireland - try 40% accross the country with 50% in some specific areas and property types (apartments). The estate agents I work from sold a townhouse at £276,000 at the peak and it is now on the market at £140,000 with no major interest.
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Anonymous | 3 Jun 2010 11:11 am
Valuers actually valuing? I take your point but dream on.
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Anonymous | 3 Jun 2010 11:20 am
What we need is Lenders to consider lending above 80% on new build houses and above 75% on new build flats, until this happens, our building industry and the market will continue to have low activity levels, we do not want run away inflation of prices, but sensible levels of activity, like it or not, a large part of our economy is driven by housing market activity.
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Chris | 3 Jun 2010 11:38 am
Is it purely the valuers or is it partially the instructions they receive from the lender? Remember the lender determines the valuation basis and may instruct valers to falue on a quick sale basis. A conspiracy therory would be that they do this to increase margins but in reality is it just another way on managing the number of applications received and in turn the limited funds available to lend? For me I would simply like to see more transparency from the lenders regarding the instructions going out to their valuers so that we can manage our client's expectations better. Surely under TCF clients should not be encouraged to pay valuation fees and often accompanying administration fees if there is a risk that the valuation will not secure the product they seek.
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Anonymous | 3 Jun 2010 1:41 pm
I think you will find that valuers are being sued for overvaluing properties by lenders and as a result are losing or can no longer afford their PI insurance which effectively stops them from trading.
The sistuation of cautious valuations has been born out of stupidly high valuations in the past and I doubt there is a broker that hasn't applied pressure to valuers to increase a figure before.
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Tom IFA | 3 Jun 2010 3:13 pm
I wish they would provide regional figures. London and the 'shires prices are increasing mainly on supply and demand. Sorry about you guys in the other parts of the country but we really need land released for more new houses and starter homes.
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steve1 | 3 Jun 2010 5:26 pm
valuers have always had a problem in valuing & unless there are comparables they cant value. They should return the fee charged but dont. If a valuer knows his job like the rest of us have to then no pressure from any source should be needed. At the moment due to vast redundancies we are left with "valuers" who just can not value unless there is another property which has sold within a mile of subject property and provides a guide for them. It does not need a "professional" to provide this type of service. If we all started using Auction rooms we would achieve more realistic prices for our properties?
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Grey Haired Underwriter | 7 Jun 2010 4:59 pm
Steve1 - I am now sat here with my mouth agog at such pure nonesense. Let an auction room set the price and you don't think poperties would sell at completely bonkers [prices that no lender could be sure would be achievable. The system as it is still works - don't go on flights of fantasy
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