Nationwide: UK house prices up strongly for third month
UK house prices have now risen for three months consecutively and four months in five according to statistics released by Nationwide Building Society this morning. The rise for July was a very robust 1.3% month-on-month, which translates into almost 17% on an annualized basis. Clearly, housing is doing very well during this summer selling season.
While prices could still fall during the slower Fall and Winter time frame, the recent rise in prices is beginning to look like a bottoming. To be sure, prices are still down 6.2% year-on-year, but the index is within striking distance of the October and November 2008 figures, suggesting we may move into positive year-on-year territory if this trend holds through to Fall.
Nationwide’s Chief Economist Martin Gahbauer had this to say about the figures (emphasis added):
The price of a typical house rose for the third consecutive month in July, increasing by 1.3% on a seasonally adjusted basis. The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – rose from 1.0% in June to 2.6% in July, the highest level since February 2007. House prices are still 6.2% lower than 12 months ago, but this represents another sharp improvement from the 9.3% year-on-year decline in June. Even if prices were to remain unchanged for the rest of 2009, the year-on-year rate would continue to improve since prices were falling very sharply in the second half of last year. For the first seven months of 2009 as a whole, prices have risen by a cumulative 1.3%, suggesting there is now a reasonable chance that prices could end the year slightly higher than where they started. Only a few months ago, such an outcome would have appeared unthinkable.
I should also note that mortgage applications have been increasing strongly, evidence that first time home buyers are coming back to the market. This underlying demand may be buoying prices.
Overall, the data cannot be seen as anything but bullish.
House prices up for third month in a row – Nationwide website