A real estate investment house has claimed investing in UK residential housing "may have turned a corner", although physical house price rises are still increasing at a very slow rate.

Alpha Beta Fund Management has argued the UK housing market could be turning - even thought it still predicts further physical house price falls - as an existing UK house price index, the Halifax House Price Index (HHPI), gained 1.5% so far this year and its own derivatives-based UK residential index fund rose almost 20% within the first five months of this year.

Robert Page, partner and fund manager at ABFM, argued investor sentiment may be improving towards the UK residential sector as it noted data from the National Association of Estate Agents showed sales are now at their highest since October 2007 and mortgage loan approvals are rising, while other economic factors such as bond yields, share prices and the rising pound "all indicate improved expectations of economic growth".

"Sentiment does now appear to be turning in the housing market with the HHPI up 2.6% last month. APFM expects house prices to consolidate further and end the year flat to slightly lower, but not to fall by as much as the 9% now indicated by the forward derivatives market," said Page.

He argued institutional investors might be able to tap investment gains now as holdings on its own index, investing in property index products, are trading at a discount so investors would effectively be gaining exposure to housing at an average price of £140,000 (€165,250) rather than at the £160,869 average actually experienced through the HHPI.

The Halifax House Price Index is the UK's longest-running monthly house price index and its producer, HBOS, is the largest mortgage lender, with 20% of the market.

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