House prices picked up by another 0.9 per cent in June, according to Nationwide, the third increase in four months recorded by the building society.
Taking the second three months of the year together to iron out possibly freakish monthly results, this raised the average for the second quarter to 1.1 per cent above that for January/March, the first positive quarterly finding since December, 2007.
In the West Midlands, though, where prices have been more resilient than in much of the country during the long decline since September, 2007, there was still a 0.2 per cent fall between the two latest quarters.
That trimmed the average for the region to £138,254, down 11.5 per cent on the same months last year, close to a loss of 11.7 per cent across the UK.
In Birmingham, prices are down by nine per cent year on year at an average of £151,690, in line with a similar fall in Staffordshire, but otherwise less than anywhere else in the region.
Herefordshire saw the biggest annual loss in the region, with an average price down 15 per cent to £165,399 – still 121 per cent higher than ten years ago.
Coventry, which has the cheapest house prices in the region, suffered a decline of 13 per cent over the year to an average of £139,027. Prices fell by 12 per cent in Shropshire and Worcestershire to £153,762 and £170,394 respectively.
Commenting on the national findings for June, Martin Gahbauer, Nationwide’s chief economist, said that the improvement that began in March now looks like “more than just statistical noise”.
“What is unusual about the recent trend reversal, however, is that it has taken place against a background of transactions activity that is still very low by historical standards,” he added.
“Normally, such a low level of house purchases would be associated with falling house prices.”
This, he noted, could be associated with “a relentless drop in the stock of property available for sale, as potential sellers and builders have responded to depressed demand conditions by reducing the supply of property coming on to the market”.
Me Gahbauer warned of “many obstacles in the way of a genuine and sustainable price recovery”.
“Abnormally low supply levels are unlikely to last for ever, as recent price increases should make previously hesitant sellers feel more confident about marketing their properties.
“Additional supply is also likely to come from homeowners, who see their financial position impacted by higher unemployment and lower incomes.”
At the Royal Institution of Chartered Surveyors, Simon Rubinsohn, chief economist, said: “The residential property market appears to have found a floor, at least for the time being.”
But he noted Bank of England numbers yesterday demonstrating that lack of finance was a key obstacle to a more meaningful increase in housing deals.
“Tempting as it is to conclude that the bottom has now been seen in the pricing cycle, there are still considerable headwinds for the housing market to overcome, most notably in the form of further significant job losses during the balance of this year,” he continued. “That said, without any rise in new instructions, the shortage of property could remain a key determinant of the market’s fortunes.”
Howard Archer, at IHS Global Insight said: “We are still far from convinced that house prices have bottomed out and we certainly do not think that we are at the start of a renewed sharp upward trend.”