Further strong evidence emerged yesterday of an end to the fall in house prices both in the UK and also importantly, in the US.

In the UK, the Land registry has published its figures for June which show a 0.10% rise in House prices. Of all the various UK property price indices, the land registry is regarded as the most authorative as it is based on actual sale prices achieved rather than on mortgage data or pre-sale prices. Growth was particularly strong in London where prices rose 2.0% on the previous month backing up many stories we are hearing of a return to sealed bids and in some instances gazumping in the more desirable parts of the capital. There was also something of a North/South divide with all the regions from and including the Midlands south (inc East Anglia) showing positive growth, whilst Wales and North of the Midlands (note Scotland and NI are covered by separate bodies) all suffered small falls. Again as we have covered for many months now in previous blogs, we believe Q3 marks the end of significant price declines and whilst a national recovery may still be some way off, stability is now being achieved.

Whilst the Land Registry data is good news for the UK, from a global perspective all eyes have been on the US. With over $3 trillion of US mortgage debt out in the markets, the performance of the US residential market is crucial if we are to see a sustained global recovery. Not only do US house prices effect US consumer confidence, they also have large implications for the holders of US mortgage debt packaged up in various imaginative ways. In short until prices stop falling it is virtually impossible to put a line under losses and accurately value mortgage backed securities.  In this regard there was very good news today when the main US index, the Case Schiller 20 city index, rose by 0.31% for May have previously fallen for every month since the market peaked in August 2006 (34 consecutive months). Whilst it may be premature to say that this marks the end of price falls in the US, there is a very definite trend of the market bottoming out as the graph below clearly demonstrates.