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30th Jul 2009
House prices could end year on a high
House prices could end year on a high
Nationwide has suggested that there is now a “reasonable chance” that house prices will end the year higher than where they started, as its July house price index records its third monthly rise.
The lender says “such an outcome would have appeared unthinkable” earlier in the year.
The average house price was pushed up by 1.3% in July to £158,87 from £156,442 in June.
Prices have also risen by a cumulative 1.3% for the year to date.
House prices remain 6.2% lower than the same time last year but are an improvement from the 9.3% year-on-year decline seen in June.
Martin Gahbauer, chief economist at Nationwide, says: “House prices have been remarkably resilient so far this year, despite a recessionary economic background with sharply rising unemployment.
“Although this outcome has come as a surprise, it is not inconsistent with other economic indicators and asset prices, which have also bounced back somewhat after very severe declines around the turn of the year.”
He says that the fall-off in sales over last year has created a large backlog of would-be buyers but since then some of this pent-up demand has come back into the housing market.
Gahbauer adds: “Although the resulting rise in transactions has not been that dramatic, it has been enough to produce an upward bounce in prices because it coincided with very low levels of supply on the market.”
The data follows the release of theBank of England lending figures yesterday, which showed the level of mortgage approvals are now higher than the previous six-month average. |
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