House prices increased in August says Nationwide

| August 31, 2012
House prices increased in August says Nationwide

House prices have made their biggest jump since January 2010, Nationwide Building Society reports.

Despite the recession, the price of the average house in the UK increased to £164,729 in August, just 0.7 per cent lower than a year ago.

However, with mortgage approvals at low levels, the building society warned against reading too much into the August’s surprising surge.

Robert Gardner, Nationwide’s chief economist, said: “the fact that the annual pace of house price decline moderated to minus 0.7 per cent in August from minus 2.6 per cent the previous month provides evidence that conditions remain fairly stable.

“This may be explained by the surprising resilience evident in the UK labour market, with further increases in employment in recent months, even though the UK economy has remained in recession.”

The August price increase follows a 0.8 per cent fall in July.

Earlier the week Land Registry figures revealed an increase in London house prices to an all-time high in July.

The average price of a house in London in July was £367,785, compared with £162,900 nationally.

Demand remains strong for so-called trophy homes in exclusive areas of London, despite an increase in stamp duty to 7 per cent on properties worth £2 million or more.

Prices soared by more than 16 per cent in Kensington & Chelsea over the year, while Westminster saw an increase of 14.4 per cent.

The weakness of the pound and the country’s relative political and financial stability has made London properties attractive to overseas buyers.

However, house prices have fallen year on year in more than half of UK regions, the Land Registry said.

The North West suffered the most substantial year-on-year fall, with a 3.9% decrease.

The average price of a house in the North West is now £109,235.

Prices have also fallen in Wales, the West Midlands, Yorkshire and the Humber, the South West and the North East.

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