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Nationwide reports 'unseasonably strong' house prices

29 September 2006
House prices increased by 1.3 per cent in September, according to Nationwide Building Society, whose report confounds market analysts who predicted a market slow-down in the aftermath of September's interest rate rise.

The annual rate of house price inflation in the month reached 8.2 per cent - the fastest rate of growth for eighteen months.

Nationwide's latest report indicates that the growth has been driven in no small part by landlord investors in the booming buy-to-let sector.

"There is clearly a significant increase in tenant demand in the UK coming from the large influx of immigrant workers," said Fionnuala Earley, Nationwide's group economist.

"There are also other, typically younger, households choosing rental as a lifestyle choice."

Ms Earley does note that home ownership will continue as the preferred housing choice of the UK majority for the foreseeable future, as three-quarters (75 per cent) of young people still aspire to own a home for themselves.

The report also notes the average house price in the UK is now £169,413, approximately £13,000 up on last year. This is the equivalent of a £35-per-day rise over the last year.

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