Wednesday, October 7, 2009
No return to the bust, either
House prices have jumped by nearly 6pc since April but economists are divided over how long the recovery will last. The improvement has come despite rising unemployment and the ongoing problems in the mortgage market, while the number of mortgages approvals is still half the level of 12 months ago, at a volume that would normally be consistent with price falls. Seema Shah, of Capital Economics, is bearish, saying: "We suspect that recent gains in house prices will be reversed in due course. Currently, prices are being driven up by a shortage of property for sale." But Ray Boulger of the Council of Mortgage Lenders is more upbeat, saying he expects house prices to rise 7.5% overall this year, with 5-6% growth in 2010.