An optimistic consensus is emerging in the UK media that the worst of the recession is over and that house prices are rising again and will continue to rise. This appears to be reinforced by the recent house price surveys from the Nationwide building society and the Halifax, two of the UK’s biggest lenders.  

However, both companies are anxious to play down suggestions that they are reporting an underlying revival in the property market, after 18 months or so in which prices dropped by about 20%, and sales fell by two-thirds.  

The line amongst wary analysts is that the statistics from the lenders, and other sources, suggest that the market’s slump has eased off.  

The Halifax survey suggests that in July, the average UK home was worth £159,623, which was £5,100 more than in April, a rise of 3.3% in just three months. Meanwhile, the Nationwide’s survey suggested that the average UK home in July was worth £158,871. That was £11,000 more than it was worth just five months before in February, a rise of nearly 8% in that time.  

So there is no doubt that for now, prices are rising again, and quite strongly.  

But the Royal Institution of Chartered Surveyors (Rics) has pointed out that prices have been squeezed higher by a small pick-up in demand from buyers, combined with a lack of supply of homes to buy.  

This artificiality in the market means that both the major lenders are reluctant to predict that the recent rise in prices will continue, even for the next few months.  

On the other side of the argument and directly challenging the emerging interpretation, The Centre for Economics and Business Research (CEBR) has forecast that after more falls in value this year, UK average prices would go up by 2% in 2010.  

The consultancy is the latest group to indicate its predictions for the housing market and is gloomier for homeowners than the other predictions suggesting prices might end 2009 higher than they started it.  

The CEBR said the value of the average UK home would continue to rise in the following two years, increasing by 3.6% in 2011.  

The shortage of homes built during the recession would cause supply to be tight and so support an upturn in average prices, the report said.  

From their peak in the third quarter of 2007 to a predicted trough in the first three months of 2010, prices would have fallen by 24%, the report said.  

I am not endorsing the pessimistic view over the optimistic one at the moment, but with the media beginning to trumpet a strong recovery it is vital that anyone involved in the market knows that it could yet sink further. A media narrative is no match for cold, hard market data.

There has been two complimentary pieces of good news about house prices this week. Firstly, house prices in England and Wales have risen month-on-month for the first time since January 2008, according to the Land Registry.  

The 0.1% rise in June compared with May brought the value of the average home to £153,046, the survey found. The survey compares the price of homes sold now with the price paid before.  

This is the first time in well over a year that the monthly change has been positive. However, as the monthly increase is only 0.1%, the movement does not yet signal a return to solid growth. 

The survey is widely considered to be the most authoritative property price survey because it measures the change in prices by recording completed sales rather than mortgage data.  

Over the year to June, prices of detached homes in England and Wales have fallen the least, by 12.2%, the data revealed. Semi-detached homes (down 14.3%), terraced houses (down 14.6%), and flats or maisonettes (14.8% down) all witnessed bigger falls in value.  

During the same period prices fell the most in the north-east of England, a fall of 15.9%, and the least in the West Midlands, which saw a drop of 11.9%.  

The average price for a home in London is now £301,859. In the North East it is £106,424. On a local authority level, Middlesbrough experienced the smallest annual house price fall in June, down 7.9%, with Luton seeing the biggest fall, down 23%.  

The slump in activity in the housing market at the start of the year was revealed by the number of transactions, which dropped to 30,997 in January to April, from 59,948 during the same period a year earlier.  

This affected all sectors of the market, but was at its peak among the largest properties in England and Wales. There were 100 homes sold for more than £2m in April 2008, but a year later this had dropped to 36.  

The second piece of good news is that although this month’s price rise was very small, it now looks like house prices will eventually end the year higher than they started. 

Analysts now believe that there has been a pool of prospective buyers who were “ready and able” to buy during the credit crunch but had been put off by the uncertainty in the economy.  

Now the worst of the crisis is over, or averted, these buyers have come back to the housing market, encouraged by low interest rates. This rise in demand and activity has coincided with few properties being put up for sale and so prices have bounced upwards.  

No-one should believe that the housing market is back to business as normal because the unemployment lag could still drag it back down again later this year or even next year. But for now, the market is once again lively and providing opportunities for many.