Nobody’s calling the bottom of the market just yet, but today the Nationwide Building Society said that UK house prices rose 1.2% in May – the biggest rise in over a year and a half.

Is this the start of the great house price recovery? Probably not. With the economy predicted to contract by 3.5% this year, unemployment set to rise, and the general scarcity of lending capital showing few signs of abating, May 2009 could well be a blip on the graph.

According to the Nationwide House Price Index, April saw a 0.3% fall (-15% year-on-year), while May’s 1.2% rise puts average house prices 11.3% down on 2008 prices.

Whether the recovery’s started or not, it does at least look as though the rate at which prices fall should be wholly more manageable than in 2008.

Learn more about how house prices are calculated, or read the full May 2009 Nationwide House Prices Report.

Which way do you think house prices will go? Has the market bottomed out? Let us know your thoughts by leaving comments below…

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In these uncertain times, trying to make sense of daily and differing reports on house prices is a daunting task. So I’m not even going to try!

Kate Faulkner wrote a great piece for us on understanding conflicting house price reports, which is well worth a peek. If you want to make up your own mind, here’s some of the latest house price reports for your perusal.

Rock kickstarts lending with 70% rise in home loans
This Is Money

Property prices on the rise
South West Business (West Country)

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The Nationwide’s March house price report suggests that prices rose by 0.9 per cent in last month. This is against falls of 1.9 per cent in February. Overall, prices are down 15.1 per cent on March 2008. The recent, modest rise pushed the average price back over the £150,000 mark.

Nationwide are warning us about getting carried away, though. It’s far to early to talk about a market recovery, although right now I think we’re all just content with a bit of market stabilisation.

You can read the full Nationwide March House Price Report here, and find out how Nationwide calculate their house price statistics here.

How will a rise in prices affect you? Can you see light at the end of the tunnel, or will the market start falling again? Please leave your comments below…

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February 2009 saw the lowest level of lending on mortgages since 1991, according to the British Bankers’ Association. The total amount borrowed on mortgages last month was just £9.2billion (down from 9.7billion in January).

While gross lending may be down, the number of individual mortgage approvals rose from just over 24,000 in January to 28,179 in February. This figure is inevitably well down on 2008, but it suggests that more people are buying more houses for less money. Sellers are willing to accept lower offers and those previously priced out of the market are finding themselves in a position to buy. With London house prices stabilising, there are some genuine signs of a modest market recovery and a correction of house prices to more realistic levels.

Findaproperty.com have more detailed info – note that mortgage approvals for house purchases are up, while remortgaging approvals are down.

What do you think about the latest figures, and how do they affect you? Please leave your comments below…

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In the last few moments the Bank Of England announced that the base rate of interest has been cut from 1 per cent to 0.5 per cent.

This will hit savers where it hurts, but will it coax the banks into lending?

Full report here.

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With the base rate of interest currently set at 1%, and first time buyer mortgage approvals on the rise, there’s a big risk that new homeowners only planning for the present will get caught short once rates increase.

As recently as September 2008 the base rate was 5%. It’s quite possible that the rate could rise as fast as it fell, which would leave first-time buyers on currently attractive-looking tracker deals significantly out-of-pocket. Having shopped around for deals myself recently, I can testify that there’s some cheap-looking tracker deals out there if you’ve got a decent deposit – buying becomes quite a bit cheaper than renting in many cases. But be warned – have you made adequate allowance for big shifts in the base rate? I haven’t, so I won’t be buying.

(If you’re looking for a deal, the 4Homes Mortgage Finder is a quick way to find out the various mortgage offers you can get from loads of lenders…)

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The Halifax reported today that house prices rose 1.9% in January. This means the average UK house price is now just shy of £164,000. This is an enormous 16.8% down on January 2008’s £197,243 figure. Mortgage applications and approvals, particularly first time buyer mortgages, were also up month-on-month. Not quite a return to the heady days of 2007, but more a sign that the market might now be settling down, with first time buyers set to benefit.

Also today, the Bank of England cut the base rate of interest to 1%. If you’re on a tracker, quids-in. It’s the fifth rate cut since October, when the rate was set at what now seems like an astronomical 5%. Expect your savings account’s dwindling interest to take another hit.

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Not getting a clear picture of what’s going on in the markets? We don’t blame you – it’s all moving faster than a speeding car at the moment, and anything anyone tells you is likely to be out of date after five minutes. I’ll let you into a secret about my bedtime, morning and lunchtime reading – for a clear picture, I tune into the Channel 4 News website and, after that, Robert Peston’s blog (he’s the BBC business editor and he tells it like it is without all the puff, politics and panic). The latest? The government has launched it’s bank rescue scheme… Click on the links to find out more.

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Halifax Bank of Scotland (HBOS) has confirmed that it is in talks with Lloyds over a merger, a move that will create a super bank on our high streets. Combined, they will have over 25 per cent of the UK mortgage market, not to mention a large proportion of both business and personal banking.

So, how will it affect you? Well, the good news is that it shouldn’t – you’ll still have to fulfill your mortgage payments at the same rates and your savings are safe. If you’re a shareholder, you’ll be glad to know that the last hour or so saw shares returning to the levels they were at before the crisis became known.

What happens over the next few days remains to be seen – we’ll keep you posted.

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