Is the Housing Market Starting to Perk Up?

Is the Housing Market Starting to Perk Up?

Economists believe that house price falls have begun to flatten out, and some suggest we may see rises in coming months.

The two biggest mortgage brokers, Halifax and Nationwide, recorded 1.1% and 1.3% rises in prices in July, and the year-on-year fall in prices went from 15% in June to 12.1% in July. Halifax has also revised its estimates of house price changes in 2009, halving its predicted drop from 15% to 7%.

A number of factors have been cited in helping prices begin to stabilise. There is still a shortage of housing, which is driving demand and pushing prices upwards. What’s more, home building has been increasingly sparse since property prices began their dramatic decline two years ago.

Low interest rates are helping slow the fall, and mortgage providers have started easing up on lending: mortgage approvals bottomed out at around 30,000 a month, but were back up to over 47,500 in July – but that’s still a long way from the peak in 2007 of 120,000.

It may not yet be time to head to the estate agent, though. It is possible that the rises are as much due to cash-rich buyers moving back into the market, and some have expressed fears that we could see more sudden drops in prices as buyers reappear if mortgage costs rise, or any more financial trouble rears its head.

One great way to get a bargain home is to buy a small house and start renovating it – converting the garage or loft and adding extensions are typically home improvements which will add the most value to your home.

To get an idea of how much a garage conversion might cost, you can get a free online estimate using Garage Conversion Quoter.

photo credit: seemodernbrittain