House Price Increase Figures Reach Four-Month High
Nationwide Building Society has provided figures for the month of October that show a house price increase rate not seen since early summer. Month-on-month, prices gained 1.1 per cent in October compared to September.
Resultantly, the average house in Britain now costs 186,044 pounds
On a yearly measure, October's house prices are 9.7 per cent higher than the same month in 2006. By way of comparison, a nine per cent difference was recorded between September 2006 and 2007.
Commenting on the latest data, Nationwide described thoughts that, based on the four-month high, house prices could be considered free from difficulties in the financial markets, as "misguided".
1.9 Per Cent House Price Rise for August-October
In the three-month period August-October 2007, a 1.9 per cent house price rise occurred compared to the previous May-July period. This represents a 0.2 per cent rise over July-September. The analysis of house price data on a three-month on three-month basis is widely considered to yield a more accurate measure of price trends
Homeowners Reluctant to Sell in Current Economic Situation
As far as the Nationwide is concerned, the house price increase can be attributed to several factors. As described by Fionnnuala Earley, the firm's chief economist, amongst these is that of the limited number of houses joining the market.
"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", she said, adding: "The overall result is that the stock of unsold homes is still relatively low, and this is providing some residual support to prices."
Analysts Surprised by October's House Price Data
Industry experts showed surprise when commenting on the latest data.
"[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", asserted Capital Economics. "As such..." the research group added, "...we would be wary of interpreting today's data as evidence that the housing market remains robust."
Source - Construction International's Sub Editor
