Time for a house price recovery?

It used to be that anyone planning to purchase property was advised to consider three important factors: location, location, location. However, the emphasis of late has switched more to the importance of timing, timing, timing. Falling house prices have been met with speculation over when exactly the bottom of the market will be reached - as buyers obviously hope to make a move when property is as cheap as possible. Of course, no-one can truly be sure that a low point has been seen until after the fact, but commentators will seek to predict it nonetheless. Peter O'Donovan, head of mortgages at Bestinvest, suggested this week that low levels of lending appear to be indicating the trough is approaching. The British Bankers' Association revealed that the value of mortgages provided by UK banks stood at £2.7 million last month - the smallest amount that has been lent in eight years. But those planning to compare mortgages may be interested to note that the actual number of deals approved rose by 3.8 per cent in April. This, Mr O'Donovan stated, could well be the "green shoot" that signifies the start of a recovery. His comments were followed by Nationwide figures showing that house prices have actually risen by 1.2 per cent in May. The typical home is now 11.3 per cent cheaper than it was a year ago, but this figure stood at 15 per cent last month.Nationwide chief economist Martin Gahbauer noted that this is "further evidence" that the housing market is improving, although he was quick to point out that the statistics should be taken with a pinch of salt."Although the short-term trend in house prices has clearly improved from where it was at the beginning of the year, it is still too early to say that the market is turning definitively. During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again in subsequent periods," he said.Similarly, the National Association of Estate Agents has argued that it is "too early" to talk of a recovery. However, chief executive of the organisation Peter Bolton King said that its own figures do show activity to be rising, with both the number of people looking for property and the number of sales going through increasing. As a result, it may be that prices are indeed set to stabilise and those looking for the best mortgages before making a purchase could do well to pay close attention to any developments in the near future.