Homeowners have grown so accustomed to downbeat statistics — and forecasts that the market would continue to decline this year — that slightly more optimistic news comes as a shock.
Why, even members of the Royal Institution of Chartered Surveyors (RICS), who have been the Greek chorus of the downturn, charting every painful moment of the drama, are now discerning signs of life.
Suddenly, every leading price index (Chesterton, CLG, Halifax, Nationwide etc) is showing an average price rise. There is a lack of properties for sale, sellers’ expectations have finally become more realistic and there are more purchasers looking for bargains before sentiment improves further.
Some estate agents, such as Douglas & Gordon, the London firm — surprised as anyone by the resilience of the surge in buyer interest — are even feeling confident enough to recruit.
In an instant nostalgia moment, Nationwide has started a debate on which home improvement adds most value — a loft conversion creating a bathroom, or so it reckons.
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But before everyone gets too excited, we should look closely at the building society’s other findings. To guide prospective purchasers towards properties with the greatest appreciation potential, Nationwide highlights the widening gulf between valuations of the most sought-after homes in “prosperous professional neighbourhoods”, often in the South, and those in locations where “struggling families” live, often in the North.
Households with spare cash and equity are able to obtain finance and, as a result, they are competing for the nicest homes, bidding up prices, albeit from much reduced levels.
In less sought-after neighbourhoods, bargains may also abound, but prices, although they may be bottoming out, are likely to go nowhere fast, as would-be buyers are still shunned by lenders.
This has been the story of the current slump and is likely to remain so.
The forecast that economic recovery would arrive first in the South and take longer to be established elsewhere still seems a fair assessment. The present pattern of lending — more than 70 per cent of mortgages are being advanced to borrowers in the South — will reinforce this trend.