House market recovery ‘faces risks’

House prices are beginning to stabilise, however there are still a number of risks on the horizon for those looking to purchase or sell a property, one expert has suggested.

Chief economist at Nationwide Martin Gahbauer noted that while new statistics were “encouraging to see” there were still a number of considerations for the future.

“Abnormally low supply levels are unlikely to last forever, as the recent price increases should make previously hesitant sellers feel more confident about marketing their properties,” he said.

Furthermore, despite there being more buyers looking to purchase a residence this has not developed into a higher transaction rate as lenders are still reluctant to provide funding, Mr Gahbauer remarked.

Rises in the rate of unemployment and decreasing job security are also hindering possible growth, he added.

Prospective homeowners were recently told that financial planning is the best way to avoid getting into negative equity on the purchase of a new property by the head of consulting at investment company Ducalian, Timothy Lambert.

By Francis Finch