The recent Nationwide house price survey indicates that house price inflation has hit 10.5%. Regular readers of this blog will know of my disdain and concern for house price surveys given their tendency to paint a misleading picture and also not to accurately show the basis on which they are benchmarking their headline. However, it was interesting to see that the Nationwide did post a note of caution in its report advising that the past 12 month surge would tail off later this year with sellers starting to outnumber buyers.
There was a reduction in the number of purchasers in the Dundee and Angus areas in the last 18 months, however, this was balanced with the number of properties coming on the market effectively reducing by half and then half again since the peak of 2007, keeping prices level and in some cases growing. We are now noting a huge increase in the number of properties coming on to the market, not back yet to 2007 levels, but moving in the right direction.
My concern is that with the lack of first time buyers and also the number of sellers who are non-movers, i.e. executry sales or people who are wishing to move out with the area, I think this will cause house prices to level off in the 2nd half of the year.
I am pleased to note that the property market is however gaining a momentum and one advantage (the only advantage!?) of the dreaded Home Report is that because of the high upfront cost at least you have to assume that every seller is a committed seller given the amount of money that is now involved in the process. I am sure that there will be more blogs over the next 12 months confirming the trend in prices and I will continue to update you.