Mortgage approvals up 19% from last quarter 2008, indicating 'possible stabilsation'

Average house prices rose 2.6% in May, according to Halifax’s latest survey.

House prices on an annual basis were 16% lower in May than the same month last year, with the average house price in the UK at £158,565.

The news follows data from Bank of England showing that the number of mortgages approved for house purchase increased 19% between the final quarter of 2008 and the first quarter of 2009.

Nitesh Patel, housing economist, for the Halifax, said the data showed “tentative indications of a possible stabilisation in activity,” but that too much should not be read in to the increase.

He said: “It is always important not to place too much weight on any one month's figures. Historically, house prices have not moved in the same direction month after month even during a pronounced downturn. For example, prices fell by 11% nationally during 1991 and 1992, but there were five monthly price rises in this period.”

Simon Rubinsohn, RICS chief economist said: “It is too early to say that house prices have now bottomed out.”

However, Nationwide has also recently released figures indicating a 1.2% rise in prices in May. Martin Gahbauer, chief economist at Nationwide said at the time that the combination of rapidly rising unemployment and tight access meant that further price declines were likely.