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UK housing market improves slightly in August

Warnings not to read too much into improvements in the UK housing market in August have come after Nationwide reported a 1.3% increase in house prices.

Despite this slight improvement, Robert Gardner, Nationwide’s Chief Economist said: “Given the difficult economic backdrop, the extent of the rebound in August is a little surprising.

“However, we should never read too much into one month’s data, especially since monthly price changes have been impacted by a number of one-off factors this year, such as the ending of the stamp duty holiday for first time buyers.

“Nevertheless, the fact that the annual pace of house price decline moderated to -0.7% in August from -2.6% the previous month provides evidence that conditions remain fairly stable.”

Mr Gardner put the housing market’s stability down to resilience in the UK labour market and employment increases despite the continuing recession.

Globally, the housing markets are still suffering, however predictions that the U.S. market will recover from the Federal Housing Finance Agency (FHFA) have been reported, after figures showed a house price index rise of 1.12% in quarter two.

U.S. figures showed a significant improvement from the previous year, when the seasonally adjusted purchase-only house price index fell by 8.76%

Matthew Monatgu-Pollock, publisher of the Global Property Guide commented: “What worries me is the negative figures for some European housing markets, and their economic impact.

“The British figures are not too bad, but the numbers for many European countries are terrible.Housing demand, and housing construction, are an important part of any economy, and the continuing fall of prices in the hardest-hit countries in Europe will impact already depressed economies, and individual savers’ balance sheets.”

The UK fared well in comparison to other European countries, as Ireland, Spain, Greece, Portugal and the Netherlands’ house price indices all slipped over 10% after inflation.

This was posted in Bdaily's Members' News section by Miranda Dobson .