Homes 'May rise in value in 2009'
3rd August 2009
Homes 'May rise in value in 2009'
The UK's largest building society believes there is a "reasonable chance" that house prices could end the year higher than they started 2009. Such an outcome was "unthinkable" a few months ago, the Nationwide's chief economist Martin Gabhauer said. The Nationwide's latest house price survey showed prices rose by 1.3% in July compared with the previous month.
The average UK home costs £158,871, with the annual rate of property value falls slowing sharply to 6.2%, it said. The three-month on three-month comparison of property prices - considered a less volatile measure than the monthly data - rose from 1% in June to 2.6% in July. This was the highest level seen since February 2007, when the housing market was booming.
Mr Gahbauer said there had been a pool of prospective buyers who had been "ready and able" to buy during the credit crunch but had been put off by the uncertainty in the economy. When the worst of the crisis was over, or averted, these buyers came back to the housing market, encouraged by low interest rates. The rise in demand and activity coincided with few properties being put up for sale, and so prices bounced upwards, he said. The rise in prices would be stunted owing to the squeeze on earnings and rental income, and the rise in unemployment, he warned. "It is unlikely the price increases can be sustained for long at the very strong rate observed over the last few months," he said.
(BBC News)
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