House prices rose by 0.9% in March according to the Nationwide, but this may not be the bottom of the market.
House prices rose last month for the first time since October 2007 but before we start celebrating the bottom of the market, we should consider a few important facts.
- Unemployment is still rising
- The UK is still in a recession that is certainly not bottoming yet
- Consumers still lack confidence and fear that house prices still have further to fall.
- Credit is still in short supply and lenders are still withdrawing schemes or pulling out of the market altogether.
It is consumer confidence that will turn the market. When people start to believe that investing in property will show a return, rather than a loss, then we will realise that the market has bottomed.
Don’t get me wrong, there is some good news starting to flow into the marketplace.
Mortgages rates are the lowest ever and there are some amazing deals if you have a large deposit and a good credit report.
People have to move because of changes in personal circumstances or a job move so there is still a large demand for housing.
So have we seen the start of an upwards trend in house prices? Almost certainly not, however any indication that demand is creeping up and sellers are realistic with their asking prices shows that the property market is at least starting to move in the right direction.