Does that sound a bit ominous? It’s not supposed to be, as there’s good news…….at least I think it’s good news. Nationwide released their latest house price index today which showed prices grew on average by 0.9% in June. There, that’s it, good news. But even better, the three month change, which is regarded as a more reliable indicator of what’s really happening, turned positive (went up to you and I), for the first time since December 2007. Brilliant! However, there are two things that take the gloss off it for me. Firstly when one of the main publishers of a house price index has some good news, typically one of the others, (Nationwide, Halifax or the Land Registry), produces figures for the same period showing something else, often not good. Part of this is that they all base their findings on different things, with the two lenders basing their numbers on mortgages they arrange. The Land Registry rely on completed house sales, which as anyone that has ever bought will know, is three months out of date by the time the sale goes through, but where does that leave the homeowner Secondly the figures, particularly in the case of Nationwide & Halifax, are based on a very small sample of house sales, as the market is still subdued. Actually, I’ve thought of something else. Whoever provides the good news can’t do so without taking something back, so as soon as there is some good news, they pour cold water on it. Just like this from the Nationwide release: “there are still many obstacles in the way of a genuine and sustainable price recovery” “there are still considerable headwinds facing the demand side and until we see a more robust recovery in house purchase activity, it is too early to be confident about a full-scale recovery of prices." We know all that, but it would be good to have 5 minutes to enjoy the good news before the rug is pulled from under us again thank you very much. Whatever your opinion on the current direction of house prices it seems that for today at least your house could be worth 0.9% more. Don’t spend it all at once, the Halifax figures are out soon.
Is This The Beginning of The End?