Nationwide: House prices rise just 0.1% in September

| September 29, 2011 | 0 Comments

The latest house price index from the Nationwide Building Society has revealed prices rose by just 0.1% in September on a monthly basis.

On an annual basis, house prices are now 0.3% lower than this time last year with the average UK home costing £166,256.

Meanwhile, when comparing prices in the three months to the end of September with the previous quarter (which is a more reliable indicator), prices were unchanged.

The latest figures suggest the housing market will remain subdued as a lack of buyers, together with the ongoing lack of mortgage availability, means demand for housing is weak.

The Nationwide’s chief economist, Robert Gardner, comments: “Sentiment towards major purchases is depressed, as a result of weak labour market conditions and ongoing pressure on household budgets from above-target inflation.”

Mr Gardner expects prices to remain relatively stable throughout the remainder of the year but cautioned that the outlook had “darkened” due to the euro zone sovereign debt crisis which is denting confidence and driving up banks’ funding costs.

In other news today, the Bank of England said the number of new mortgages approved, but not yet lent, for home buyers in August grew to its highest level since December 2009 with 52,410 mortgages approved last month.

However, approvals remain well below levels seen prior to the financial crisis.

Since the early 1990s, mortgage approvals have averaged around 90,000 a month but the credit crunch saw a tightening of lending criteria and many have been unable to secure a mortgage unless they have a significant deposit.

Also this week, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in August in the UK.

According to HMRC, 78,000 homes worth at least £40,000 or more were sold in the month – 6,000 less than the previous month and 3,000 lower than in August 2010.

However, August is traditionally regarded as a quieter month due to the holiday season.

At the height of the housing boom in July 2007, 151,000 homes were sold.

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