House prices in England and Wales fell at their slowest annual rate in almost a year in August, as prices rose for the first time in more than two years on the month, property data company Hometrack said today.
House prices rose 0.1 per cent from July, the first monthly rise since July 2007, leaving the annual rate of decline at 6.7 per cent, the slowest since last September.
However, prices were buoyed by a lack of supply in London and south-east England and did not reflect a broader improvement in the housing market, Hometrack said.
Prices rose in just 11 per cent of the postcode districts covered by the survey and were static in the remaining 89 per cent, the survey showed.
"Far from a national housing market on the up, the headline figures are being skewed by price rises that are restricted to relatively small pockets of the market suffering from a lack of housing for sale," said Hometrack director of research Richard Donnell.
Record low interest rates have made people less likely to fall behind with their mortgage payments and resulted in fewer forced sales than might have been expected given the severity of the economic downturn and capping house price falls.
But the housing market is still some way from recovery and tight lending conditions and rising unemployment still pose a threat to a sustained pick-up in activity.
"The key short term risks to the market are either a sudden reversal in buyer sentiment or a marked increase in the number of properties coming to the market for sale. Both of which will have the effect of driving down prices," Mr Donnell said.
Reuters