According to figures released last week by Nationwide, the average price of a home in the UK rose by 0.9% in September of this year. In monetary terms, this percentage stands at £161,816, which is virtually identical to the average price that was recorded in 2008. However, does this represent yet another promising sign that the UK housing market is making a swift recovery? Although homeowners and property developers may want to believe that it does, there remains considerable doubt and confusion over these most recent of statistics.

Indeed, homeowners have been buoyed of late as house prices have crept back to 2008 levels and mortgage lenders are becoming more active again – undoubtedly, the housing market has been stimulated positively. However, before homeowners dash out to the local hardware store for the tins of magnolia and various DIY bits and bobs that are necessary in order to prepare the home for sale, it is worth sounding a note of caution. Whilst the average price of a home has increased during the previous year, the figure remains nowhere near its peak in 2007. In fact, all signs indicate that the housing market will take five years or so to fully recover and that recent price trends are stimulated by short-term stock sales.

Furthermore, the main reason behind this lethargic recovery is, according to a number of leading economists and property experts, that house prices remain significantly overvalued. In fact, the International Monetary Fund’s most recent World Economic Outlook suggests that the majority of housing markets in the world are due to fall further. In the case of the UK, that fall is expected to be in the region of 12-13%, which could see the average price of a home drop to around £140,000. Thus, the time for waiting goes on for many homeowners.

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