Mortgage News
House prices rise for fourth consecutive month
House prices rose for the fourth month in a row during August as demand for properties continued to outweigh supply, according to the latest Nationwide House Price Index.
The average price of a home has climbed by 1.6% in August to reach £160,224 from £158,871 in July.
The monthly increase has also reduced the annual rate of decline in property values. This has now slowed sharply to 2.7%, compared with July’s 6.2% fall.
The three-month on three-month comparison of property prices rose by 3.3% in August, up from 2.7% in July, which is the highest level of three-monthly growth since February 2007.
Martin Gahbauer, chief economist at Nationwide, said: “The fall in debt serving costs has meant fewer homeowners are under immediate financial pressure to sell than might have been expected in a recessionary economic background with rising unemployment. Partly, as a result of this, fewer second-hand properties had come onto the market than is normally the case in recessions, which moved the balance of supply and demand more in favour of sellers over the course of 2009.”
He added a key factor in price increases was the exceptionally low level of interest rates.
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However, Gahbauer warned that the strong house price increases of recent months will become difficult to sustain when interest rates ultimately start to rise again as the wider economy recovers.
He added: “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.”