Figures that were recently released by Nationwide have shown that there has been an increase of 2 percent in property prices in the UK. The lender has confirmed that house prices are now higher than they were at the same time last year by around 2 percent, and that property prices have increased for the sixth month in a row.

The last time that property prices rose year on year was March 2008, so the recent figures amount to encouraging news in the property market. However, whilst property prices are now higher than the same period last year they are still over 13 percent lower than they were at their peak in 2007, just before the global credit crunch took a hold in the UK.

One industry official said: ‘A moderation in the rate of house price inflation was to be expected, as the very strong monthly increases seen over the summer months were unlikely to be sustainable over the long run. Slower house price inflation is also consistent with developments in housing market activity, as industry figures have shown that the pick-up in mortgage approvals for house purchases has lost some momentum in recent months.’

He added: ‘Although too early to tell for sure, it may also reflect a more natural level of stock available for sale coming to the market, alleviating some of the extreme shortages of property on the market seen during most of this year.’ Another industry expert said: ‘The stand-out symptom of the current property market is that stock levels are, in many cases, half of what they were in May. There is no sign on the horizon of more natural stock levels. As any buyer will know, there is very little choice out there at present. The ongoing rise in prices has been caused exclusively by the shortage of stock and growing demand, and the absence of new housing. With house prices higher than a year ago, now could be a window for sellers to achieve a price for their property that would have been unthinkable in the spring. Rising unemployment and, at some point, higher interest rates, could see a further stabilisation, or even reverse, in prices.’

Leave a comment