House prices continue to creep upwards
HOUSE prices rose by 1.2% in January and are up 8.6% year-on-year, according to Nationwide Building Society.
Nationwide said recent economic data had provided a “mixed bag” for the housing market.
Martin Gahbauer, Nationwide’s chief economist, said: “House prices strengthened their upward momentum at the start of 2010, increasing by a seasonally adjusted 1.2% month-on-month in January.
“The three month on three month rate of change – usually a smoother indicator of the near term trend – dipped slightly from 2.3% in December to 2.1% in January, but this primarily reflects the smaller price increases recorded in November and December.
“At £163,481, the average price of a typical UK property cost 8.6% more than a year earlier in January, up from 5.9% in December. Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007.”
Mr Gahbauer said news that the economy was out of recession could not be viewed as fully positive as economic activity continued to be below pre-recession levels.
“Although there may still be some upward revisions to the initial estimates of economic growth, this won’t change the fact that the rebound in the housing market – and particularly house prices – has gone some way beyond the recovery in the overall economy,” he added.
“This is a reversal of the picture in 2007-2008, when the housing market deteriorated much more quickly and at an earlier point in time than the wider economy.”
