UK House Prices Proving Unpredictable, but Maybe...

Well, it is starting to look like the bulls have been right again. Halifax has just revealed a 0.2% price rise in August, following the rise of 0.7% in July. Or is it; according to Nationwide prices fell 0.9% in August after falling 0.5% in July.

The fact that those two -- very similar in terms of how they measure prices -- indices are falling more out of sync now than they have been since the crash started is only adding to the uncertainty that people feel for the UK housing market.

Halifax economists believe that low interest rates will sustain the market throughout the austerity and impending job cuts. They believe the market will be near enough flat this year. Because the combined rise in the last 2 months more than cancels out the falls in May and June, and that is how it has gone so far in this year. This makes it look like Halifax could well be right.

Meanwhile, after falling between February and March, the Land Registry index showed a strong growth of 0.4% for July after being almost flat in June. The Land Registry is also reporting transactions falling, which contradicts the price rises.

On top of that mortgage approvals fell again in June, from 34,574 mortgages approved for house purchase in June, to 33,698 in July. Not a massive fall, but part of a slide that has lasted several months from a high of almost 50,000 mortgages being approved per month. The worst thing is that even at nearly 50,000 mortgage approvals per month it was still short of the 20,000 properties being added to Rightmove every week.

But low and behold, prices are continuing to rise aren't they? Well, yes they are, except of course according to Nationwide.

Nationwide matched up with the Land Registry in falling 1% in February, but then bounced around 1 % growth for March and April, which is when its decline began. In May prices grew only 0.4%, and flat lined in June, before the 0.5% and 0.9% falls mentioned for July and August.

The truth is that the housing market has now proven itself unpredictable. For many months now there has been plenty of things to put plenty of pressure and push prices down, but some mystical force seems to combine with low interest rates to pull it through. All that time though, mortgages were rising, with mortgage approvals now falling, perhaps that run is coming to an end.

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