House prices up 1.6% in August

| August 27, 2009 | 0 Comments

August saw a 1.6% monthly gain for UK house prices, with values increasing for the fourth consecutive month, Nationwide has reported.

The building society’s index puts the average price of a property at £160,224, up from £158,871 in July, with the rise slowing the annual rate of decline to an almost acceptable 2.7%, compared with 6.2% in July.

The three-month on three-month measure now shows a 3.3% rise in August, up from 2.7% in July.

Nationwide’s chief economist, Martin Gahbauer, attributes the improvement to “exceptionally low” interest rates.

He comments: “The fall in debt serving costs has meant that fewer homeowners are under immediate financial pressure to sell than might have been expected in a recessionary economic background with rising unemployment.”

As a result, the balance of supply and demand has shifted in favour of vendors.

However, interest rate rises are inevitable at some point and Mr Gahbauer cautions: “The eventual exit from exceptionally loose monetary policy could make the recovery in the housing market bumpier than some might expect after the last few months of price increases.”

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