Nationwide: house price inflation slopes off at 9.3 per cent

28 March 2007
Three recent interest rate rises are seemingly beginning to take effect, the latest Nationwide statistics suggest, as house price inflation slowed to 9.3 per cent in March.

But constraints on supply will continue to bolster UK house prices until more affordable housing is brought to market, the mortgage lender's chief economist Fionnuala Earley commented.

"House building targets remain woefully low, especially in parts of the south-east," she remarked.

Meanwhile, the British Bankers' Association (BBA) backed the building society's story of tempered demand by revealing that mortgage approvals granted by its members tailed off in February to 167,000 mortgages approved.

Moreover, gross mortgage lending fell significantly from £16.6 billion in January to £14.9 billion in February, the BBA announced.

Nevertheless, the size of the average loan taken out by homeowners grew to £150,400 as continuing house price growth forced those homeowners who were taking out a mortgage to fund their purchase with a larger loan.

And over the long term, the trend to more expensive mortgages is speeding up, BBA statistics director David Dooks indicated. "The last £50,000 rise in the average house purchase loan has occurred more than twice as quickly as the previous £50,000 increase," he said.

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