House Prices Rise by 6% during 2009
After December saw the eight straight month in a row of house price increases, the overall price of houses during 2009 has risen by 5.9% – a far cry from the massive decline of 2008 and better than many analysts had predicted for the year end. Signs of economic recovery, unemployment being less high than had been feared and low interest rates have all contribute to the general rise in prices.
In December the average cost for a house in the UK totalled ?162,103 according to the Nationwide Building Society. 2008 saw prices drop by a massive 15.9% however, so it will take more than the same again this year before house prices are back to their previous 2007 prices.
How long will the good news last for homeowners and what does 2010 hold? Prices might still be on the rise but they have slowed down in recent months – with the 0.4% rise in December, paling compared to rises of over 1% during the summer months.
The market has mostly been propped up by cash buyers, and it’s unclear if these buyers can continue to sustain the market for long into the New Year, even though interest rates are due to remain low for some time to come.
Chief UK and European economist at IHS Global Insight, Howard Archer predicts that house prices could begin to fall again in 2010:
“While the Nationwide data indicate that house prices ended 2009 still on an upward track from their February low, the markedly reduced increases in the final months of the year suggest that the rally is flagging. This fuels our suspicion that house prices are likely to suffer a modest relapse in 2010.”