Nationwide: House prices up 0.9 percent in April

| April 27, 2007 | 0 Comments
Nationwide: House prices up 0.9 percent in April

House prices were up again in April according to a new survey by the Nationwide Building Society. Prices were up by 0.9 percent over March, putting annual house price inflation at 10.2 percent. The average price of a house in the UK is now up to £180,314. Still, the Nationwide says that price growth is beginning to slow down on a long-term basis, with prices up 2 percent in the period between February and April. That was the slowest amount of growth in a three-month period since August 2006.

The new data is expected to weigh when the Bank of England meets again to consider whether to raise interest rates, which many analysts expect to rise to 5.5 percent in May. The higher interest rates could, in turn, persuade more people not to invest in a house for the time being.

A spokeswoman from Nationwide said that previous rate hikes have not hurt demand, but that this trend is already beginning to reverse as the number of first time home buyers fell by 3,200 between December of 2006 and February of this year. Too steep a rise in interest rates, she said, could reduce demand considerably and potentially destabilize the market for homes. However, the building society’s latest report also said that rates would have to go up by another 2 percent before house affordability would be as damaged as it was in the late 1980s. This, the report says, is no likely in the current economic climate.

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