Be cautious over house price optimism

Homeowners considering whether to move house or build a home improvement, such as a conservatory, have been warned not to get too carried away with the latest figures from Nationwide.

The data shows the average property price rose by 1.2 per cent in May, bringing the typical value of a UK residence to £154,016.

However, this is still 11.3 per cent lower than statistics from May 2008 and the Royal Institution of Chartered Surveyors (Rics) urged caution.

The bodys own research shows a large proportion of potential sellers had either decided to rent out their home, or stay where they are.

Rics chief economist Simon Rubinsohn said this had led to the market stagnating over the past two years and suggested it was something to bear in mind before discussing an industry recovery.

However, he said it was good news and hinted there was a chance prices could soon stabilise.

"[The findings are] consistent with the recent trend in the Rics sales-to-stock ratio which has now risen for four consecutive months; historically a good lead indicator of turning points in house price inflation," he added.