For the seventh consecutive month the Bank of England left interest rates at 0.5% today.
In response, James Thomas, Head of Residential Development and Investsment at Jones Lang LaSalle, said:
House prices increased by 1.0% in September according to Nationwide, the seventh consecutive month of positive growth, with average prices having now returned to those seen a year ago. Improved sentiment and a lack of properties available for sale have been the key drivers of recovery combined with demand in London from overseas purchasers attracted by the weakness of sterling.
However, just as we have been reporting, he went on to say:
… the current upward trend in house prices is unsustainable and that prices are likely to contract by a further -7% during 2010. The prospects for house prices going forward will be dependent on the speed of economic recovery and will be heavily influenced by constrained credit conditions and the impact of rising unemployment.