Hints at Recovery says London Mortgage Broker, London Mortgage Advice Tuesday, 2nd June 2009

In the UK property market, for those investing, there have been different levels of optimism among recent indicators. News around the turn of the year that buyer enquiries were on the up was a particularly low level, given that prices and transactions were still falling, but something stronger and higher has begun to appear since.

To begin with, signs emerged that mortgage lending was starting to grow again, while transactions stopped declining and began to rise again. To this may be added a few hints that the wider UK economy has seen the worst of the recession, such as improved readings in the Organisation for Economic Co-operation and Development's Composite Leading Indicators.

People that commentate on these things have urged caution over any conclusion that there may be a big rebound in the market soon - suggesting that the historic levels of lending and transactions are still low - but recently appear to have brought reason for the highest level yet.

As recently as last week Nationwide recorded a 1.2 per cent rise during May, the second time in three months that its index has seen an increase.

Now may have tilted the balance much more in favour of the optimists, who may consequently see now as a very good time to invest. Firstly, housing website Hometrack recorded that the average UK house price remained the same in May as it did in April - the first time in 20 months it has not fallen.

However, in the context of one survey showing prices rise and another staying put, those looking for positive signs may be cheered by the latest Land Registry statistics. April's data revealed saw a drop of 0.3 per cent, compared with 0.4 per cent in March and two per cent in February.

Could this reveal a pattern of a slowing decline, rather than an end to the slide and for that reason more solid conclusions must be kept on hold until May's survey arrives. It may be noted that had the level of price decline increased in April, this would form a counter-argument to any suggestion that the market really is bottoming out. Instead, a slowing decline may be seen as a precursor to a stabilising of prices in May.


London saw the highest rise in April at 1.4 per cent, adding weight to the assertion of that London the capital is already seeing the price stabilisation that other parts of the country will experience later this year, from the third quarter onwards.