Are house prices really stabilising?

The old adage of property being all about 'location, location, location' has taken a bit of a bashing lately, with the economic situation prompting many to focus much more on prices. With values falling across the UK, buy to let investors are likely to have become more concerned with entering the market at just the right moment - meaning 'timing, timing, timing' may be a more appropriate mantra.

Making an investment as house prices are near their floor can help to maximise returns and as such a stir has been caused by recent indications that values may now be rising. Experts have differed in their opinions of what has led to this, while different studies have indeed presented conflicting reports of the situation.

However, those who say now is the time to invest have been given some credence by the latest figures from Nationwide. The building society has identified a trend of gradually rising prices in recent months and its figures for June show that there was 0.9 per cent increase over the month.

Perhaps more significantly, the three-month rate of change was positive - the first time this has happened since December 2007. Chief economist at Nationwide Martin Gahbauer also noted that the annual fall 0f 9.3 per cent was in single digits for the first time since July of last year.

"If the pattern of price movements seen in the first half of the year is repeated over the second half, then prices could show only a small single digit fall for 2009 as a whole. This would represent a stark shift from trends seen at the turn of the year, when most indicators were pointing to a repeat of the large declines seen in 2008," he said.

Commenting on the figures, Royal Institution of Chartered Surveyors chief economist Simon Rubinsohn observed that a floor in the market may indeed have been found.

However, Mr Gahbauer was keen to point out that "many obstacles" still stand in the way of a genuine, sustained recovery of house prices. He suggested that hesitant homeowners are likely to start selling as confidence grows, while an increase in supply will also come from those who have lost jobs or seen their income reduced.

As such, buy to let investors could find that prices remain low long enough to make an investment, but with Nationwide stating that improvements first seen in March are now surely "more than just statistical noise" - the time to expand portfolios could be nigh.