Housing market not recovering, says Firstrung

Posted 30/07/2009

The notion that the housing market in the UK is picking up has been challenged by analysts at Firstrung.

This week, Nationwide reported that average property values in Britain rose by 1.3 per cent during July – the third successive monthly increase.

However, Firstrung has been quick to warn that this does not mean that a full-scale recovery in the housing market is taking place.

Paul Holmes, chief executive of the organisation, said this is partly because the number of property sales is still well below the amount recorded in previous years.

“The Land Registry is reporting 35,000 sales,” he commented.

“At the peak of the market, we were getting 100,000 sales so the market has collapsed by 60 to 70 per cent.”

Nationwide has also warned that its figures should be interpreted cautiously, as it does not believe the current rate of growth is likely to be sustained for long.

However, chief economist Martin Gahbauer noted that house prices have been “remarkably resilient” this year during a climate of recession and rising unemployment.