House prices rose by 0.9 per cent in September, meaning they have returned to the same level as they were a year ago, according to a new report from Nationwide. This is the fifth consecutive monthly increase.
Commenting on the report, Nationwide's chief economist, Martin Gahbauer, said: "The recent upward momentum in house prices has continued into September, with the price of a typical house increasing by 0.9 per cent on a seasonally adjusted basis. The three month on three month rate of change – generally a smoother indicator of the near term trend – rose from 3.3 per cent in August to 3.8 per cent in September, the highest level since August 2004.
"At £161,816, the average price of a typical UK property was essentially unchanged from a year earlier, representing the first time since March 2008 that the year-on-year rate of change has not been negative. Over the first nine months of 2009, the seasonally adjusted index of house prices has risen by 4.1 per cent, though relative to the October 2007 peak it is still down by 13.5 per cent."
However, he warned that turnover in the market is still well below normal levels: "The housing turnover rate – measuring the percentage of the private sector housing stock changing hands on an annualised basis – fell to only three per cent at the end of 2008. Although it has since recovered to nearly four per cent, there is still quite some way to go before turnover reaches the pre-downturn level of between seven per cent and eight per cent. Lead indicators, such as mortgage approvals for house purchase, suggest that turnover should continue edging higher over the next few months, but at the current rate of increase it would take another 18 months for it to reach pre-downturn levels."