Nationwide finds November house prices climb again

01 December 2006
Nationwide Building Society has found house prices rose 1.4 per cent in November – a significant increase on a 0.8 per cent rise in October which takes the average UK house price to £172,185.

It seems that the market has not yet slowed, despite higher borrowing costs for home buyers with two successive interest rate rises in August and November.

"Higher interest rates are yet to damage sentiment in the housing market because of the buoyancy of the economy and the jobs market," commented Milan Khatri, chief economist at the Royal Institute for Chartered Surveyors.

The annual rate of growth in the housing market is now up at 9.6 per cent - the highest year-on-year increase in 21 months.

Fionnuala Earley, group economist at Nationwide, said the gap between supply and demand had driven rising prices: "Stocks of properties for sale are at a two-year low, leaving buyers chasing relatively few properties."

Commenting on speculation around the risk of a dramatic fall in house prices, Ms Earley observed: "A sustained period of rapid house price growth when affordability is stretched automatically leads to speculation about when prices may begin to fall."

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