Our national obsession with property prices has resulted in umpteen house price indices springing up. Much of the time all of them point in broadly the same direction. At the moment they don't. Of the seven major ones, four claim house prices are on the up and three say prices are dropping. It's all rather confusing. So what's really happening to prices?
The latest index update was produced by Nationwide. It reported that prices dropped by 0.9% in August. That may seem like a small dip, but it adds to signs that the recovery in house prices has stalled. Nationwide's index is based on the value of properties that people applying to them for mortgages want to buy. Supporting this index is the Rightmove House Price Index, which reported a dip of 1.7% in sellers' asking prices in August.
In contrast, the Halifax House Price Index reported a rise of 0.2% in August. It too bases its index on the valuation of properties that its customers want mortgages for. But it has a much larger market presence in the North of England. Between them the two rival building societies service a large chunk of the mortgage market.Those indices aside, some of the other traditional housing market indicators are reporting truly glum findings. The Council of Mortgage Lenders (CML) has announced that 56,000 home loans were made in July for a total of £8.4bn. That's a low number for a traditionally strong month in July 2007 the total value of new mortgages for the month was £34.4bn.
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But perhaps most worrying of all for property bulls is that even estate agents are starting to realise house prices need to come down. The latest survey by the Royal Institution of Chartered Surveyors (RICS) found that 32% more estate agents reported a fall, rather than a rise, in prices in August. Many feel further falls are needed. "Vendors of property are required to be more realistic in their sale price expectations," says Stuart Allan, a RICS member from Bishop Auckland. "There appear to be a lot of overpriced houses on the market," adds Tom Goodley, another RICS member from Norfolk.
It can't be a great time to be an estate agent. After a bounce at the start of the year, helped by record low interest rates and money printing, asking prices now need to fall. "Something fairly horrible is happening out there, and estate agents, like rifle-toting teenage volunteers in 1914, are right in the frontline," says Barney Ronay in The Guardian. In short, buyers are now back in the driving seat.
To get an idea of where house prices are headed, take a look at our comprehensive collection of UK house price indicators
