David Brown, commercial director of LSL Property Services, comments:
“The modest summer recovery came to an abrupt end in September, reminding us there are still serious barriers to a sustained property market recovery.
"Outside London, prices are falling throughout England and Wales and this has contributed to a fall in the average house price of 2.3% in the last 12 months.
"This looks like bad news for property owners, but over the medium term, despite short-term fluctuations, the property market has been stable.
“It’s certainly not all doom and gloom for homeowners. Buyer activity is picking up as transactions have been much higher than we would normally expect at this time of the year. This is important because it shows the market is not on a course for terminal decline.
"Increasing activity means buyers currently feel properties represent good value and that shows there is still plenty of confidence among both buyers and mortgage lenders that prices won’t plummet in the coming months.
"Add to that the fact that mortgage finance is currently cheaper than ever before, and there are plenty of positives to focus on when assessing the market.
“That’s not to say the road to recovery is obstruction-free. Mortgage lenders’ willingness to lend at record low rates is based on expectations that the MPC will keep rates low for the foreseeable future and that the Eurozone crisis won’t become a disaster.
"While it’s probable these conditions will continue, it’s far from certain. But whatever the future holds for the wider economy, buyers and remortgagers know that locking in to a cheap fixed rate deal now gives them the best chance of securing their financial futures and getting onto the property ladder.”
Dr Peter Williams, housing market specialist and Chairman of Acadametrics, comments:
House prices
“After two brief months of marginal price increases, house prices have again started to fall - declining in September by -0.3% on a monthly basis and -2.3% on an annual basis.
"This monthly fall is small and, when combined with the positive movements in July and August during the quarter, means that the housing market is probably best described as ‘stationary.'
“The average price of a property in England & Wales now stands at £218,650, i.e. some £18,416, or 9.2%, above the price observed at the trough of the last housing recession, which was in April 2009.
"However, the price is still £13,179, or 5.7%, below the house price peak of £231,828 recorded in February 2008.
“The smoothed average house price, nationally, in England & Wales fell by -2.3% in September. Additionally, August smoothed average prices at regional level (using the extra data for August available at the end of September) and shows that only Greater London recorded annual growth.
"Greater London also recorded the largest monthly growth at +1.1% amongst the seven (of ten) regions in which house prices grew in August. That said, after ironing out some of the monthly fluctuations, by using the average annual change on a quarterly basis (i.e. the average of three months which is a more stable measure), in four regions prices fell more sharply this month compared to last month.
“Taken together, it is possible that the housing market will continue to remain more or less stationary over the next three months, giving an out-turn of approximately -2.5% for the year as a whole - roughly in line with a number of forecasts published by HM Treasury in August.
"However, the most recent economic news is far from positive and we are seeing a rapid tightening in the supply of credit and the emergence of renewed tensions around the banking sector. The likelihood of a double dip recession has increased and confidence remains very low.
"The Bank of England has begun to put funding into the system via quantitative easing and any interest rate rise is clearly on hold for a considerable period.
"Until August/early September, the trends were beginning to suggest the market would see continuous improvement but, with the unfolding of the Eurozone crisis and its impact on global markets, a rapid deterioration has taken place over the last three weeks.
"This might drive the housing market down, taking house prices with it; much turns on the success of the interventions now put in place and the further action likely to be taken in the next month or so.
“It must be said that we can only surmise what might happen to prices and transactions, based upon the conditions pertaining at the time. These are now changing such that conditions that underpinned any of the more positive trends reported in this release are already less in evidence today.”
Housing Transactions
"As our earlier News Releases have reported, transactions have picked up in recent months on the back of improving market circumstances.
"We compare our estimated number of property transactions for England & Wales to September 2011 with the corresponding 2010 results and with the average number of monthly property transactions for the sixteen year period to September 2010.
"Although transactions between February and July 2011 fell below those in the same period of 2010, we estimate that, in both August and September, the number of properties sold in 2011 has been higher than it was in 2010.
"Similarly, comparing 2011 with the long term average, we can note that from January to July 2011, monthly sales have been running at between 54% and 62% of the long term average; however August transactions rose to 66% and in September to 73% of the equiv
