UK residential property prices rise for fifth month this year

Property prices in the UK have risen again in July, fuelling speculation that the residential real estate market is well on the way to recovery.

The latest figures published today by property website Rightmove show prices rising by 0.6% in July, the fifth month increase this year.

Seven out of ten regions tracked by the Rightmove House Price Index saw prices increase with the biggest rise in East Anglia which saw a 6.1% rise. In London prices rose an average of 1.4% with Westminster experiencing the largest rise at 5.2%.

Overall prices rose 0.6% in July to £227,864 compared with a 0.4% decrease in June. Rightmove said prices have now risen 6.7% in 2009 and although there is much more optimisim commerical director Miles Shipside said strict lending criteria, fears over unemployment and rising repossessions could still prevent a recovery.

At worse he expects prices to remain stable but if banks start lending and the economy improves then further price increases of 5% are possible this year.

'With only seven volume lenders remaining in the lending game, including three government-backed institutions that are prioritizing their balance sheets over new lending, we are set to bump along the bottom for some time yet,' Shipside said.

He also believes that the chance to buy bargain property has passed. 'There is now clear evidence that there were some fire-sale prices last winter, when a few brave buyers correctly called the bottom of the market,' he explained.

'In most parts of the country prices have consistently improved during spring. With growing confidence that we've passed the bottom, buyers are more active, although they may discover that many of the best buys have gone. The window of opportunity to pick up the best buys in popular areas in this phase of the market is therefore closing,' he added.

He said buyer activity remains strong, with traffic on Rightmove's website remaining 'much higher than we would expect during the months of June and July which are typically quieter'. The increased confidence and activity is tempting more sellers to test the market, as they seek to take advantage of the smaller price difference to trade up to a better home,' Shipside added.