House prices are continuing their fall, but the number of buyers entering the market is on the up, according to September’s Rightmove.co.uk house report.

For the first time since the 5 year boom bubble burst in 2004 there is substantial evidence that the year-long recession in sales volumes has “bottomed out”.

September has seen the annual rate of house price inflation drop from 2.1% to 1.6%. This is the 4th consecutive month that affordability has improved due to average wage inflation (currently running at 4.2% including bonuses) exceeding house price inflation. This recovery in affordability could yet be derailed by the surge in oil prices increasing inflationary pressures, forcing interest rates to go back up.

The average asking price of a property in the UK is £195,407 according to the Rightmove survey.

Miles Shipside, Commercial Director of Rightmove.co.uk said, “The market has been
searching for a level of sustainable pricing at which sales volumes will begin to increase. Calling the bottom of the housing market cycle is a particular skill that successful property speculators have to exercise every time there is a recession in sales volumes or prices.

There are now clear signs that some buyers see this as the time to re-enter the market. We could be at the bottom of this cycle of the property market, though continued realistic pricing is critical to keep the momentum going.

While the drop in prices has been much more muted than in previous downturns, sales
volumes at the beginning of the year were the lowest for 10 years. That short, sharp, shock has led to sellers and their estate agents being much more realistic on pricing. The reward appears to be buyers returning in increasing numbers.

The rate of increase in traffic on the Rightmove web site is twice as
high as at this time last year, so the demand from buyers wanting to get on the property ladder appears to be there. They have just been waiting for the right signals on affordability. We may look back with hindsight and say that the summer of 2005 was the time to buy at the bottom of this cycle in the housing market.”