Are UK house prices close to a trough?

With a number of clients with existing investment properties and following a fair number of discussions recently as to when would be a good time to get back into the property market, I thought the following report from Henderson New Star made interesting reading.

Simon Ward, Henderson's chief economist, suggests that "UK house prices are no longer expensive relative to a measure of "fair value" based on rents. Prices fell significantly below fair value during the major house price busts in the 1970s and 1990s but a big undershoot is unlikely in the current downturn because low interest rates will limit forced selling."

Now I'm not an economist but that seems to make sense to me.

If you're interested Simon discusses this further in his latest online update at www.moneymovesmarkets.com.