London will lead recovery

Are these green shoots or is it just the annual spring bounce? With Easter just around the corner, the pick-up in market activity is at least encouraging.

Data from the Bank of England shows the number of loans approved for house purchase in February was higher than in January and above the previous six-month average.

Also, latest figures from Nationwide show the average house price increased last month from 147,000 in February to 150,000.

These are encouraging signs.

Of course, we’re still not even touching the sides compared with market activity in previous recessions but then this is not your normal recession.

If previous recessions can be described as V-shaped then this one looks likely to be more of a U-shape – and a long U-shape at that, with the UK expected to flatline into 2010 before we see a sustainable recovery.

London will be the housing market to watch when we hit rock bottom. It was last to see falling prices and will be first to show signs of recovery.