Building society reports growth in house prices
November 15, 2007
The Nationwide Building Society has recently reported surprise house price growth figures in the UK for October.
This comes after an unexpected 0.6% fall in property prices in September, with speculation from many experts that property prices would continue to fall over the coming months. According to the figures house prices rose by 1.1% from September, bringing the average house price to £186,044.
One official from the Royal Institute of Chartered Surveyors stated: “The endless talk of the demise of the property market is, at the very least, a little premature. The 1.1% gain in prices in October represents the highest month-on-month increase this year and provides a stark contrast to the fears of outright price declines.”
Although house prices rose in October officials from the building society have warned that people should not get too complacent, and that house prices could still be affected by the turmoil that has hit the money markets as a result of the global credit crunch.
The rise in house prices has surprised many industry professionals, with one official stating: “It seems at odds with the growing evidence of weaker buyer confidence, slowing mortgage demand and easing house price pressures shown by most other housing market indicators. As such, we would be wary of interpreting today’s data as evidence that the housing market remains robust.”
Nationwide officials report that house prices are being affected by a number of factors. One official said: “Different factors could be driving the low level of instructions, including a reluctance to trade up amid current uncertainties and the fact that low unemployment is limiting the number of forced sales. The overall result is that the stock of unsold homes is still relatively low, and this is providing some residual support to prices.”
Alan Wright
15th November 2007
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