House prices rose by 1.2% in May and this indicates some small recovery from the previous low point in February 2009. No-one is getting particularly existed about this being the beginning of a dramatic recovery, but this does probably indicate that house prices are bottoming out. I would expect that prices will vary both up and down over the coming months especially as we hit the summer which is traditionally a low point for sales. The probability is that prices will drop slightly during July and August and will pick up again during September and October as some buyers return to the markets after their summer holiday.

In reality, this is probably due to many people having put off their decision to purchase from last year who are now in a position to buy property having saved money in mortgage costs and the pressure to move has built up over this year. The number of transactions is still low and there is therefore no pressure on the markets to increase prices and it is likely that this pressure will not occur until the beginning of 2010 or later.

The good news is that the market has stabilised and for most of us a suitable market is more likely to provide a reasonable ability to estimate where values will be over the months ahead. It has taken several months for the Banks to re-position themselves with regards to mortgages and there are now some mortgages available although they nearly all require a substantial deposit. By the beginning of 2010, it is likely that more purchasers will have saved the required deposit and be in a position to obtain mortgages thus stimulating the market again.

All this does depend on suitable political situations and the Banking market being able to recover from its previous problems.

All in all, it appears that stabilisation has occurred and we can look forward to the beginning of some more transactions occurring over the remainder of this year and hopefully some growth in transactions at the beginning of 2010.

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