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UK property growth 'subdued'

30 June 2006
According to Nationwide's monthly house price index, property prices in the UK saw only a minor increase of 0.3 per cent during June.

On average, the price of property in Britain rose by £1,000 to stand at£165,730 – approximately an £8,000 year-on-year increase.

However, the survey cautioned that high levels of demand and low levels of supply in the housing market would likely lead to a decline in growth in future months.

Fionnuala Earley, a group economist at Nationwide, said: "At current assumed rates of household formation there is already excess demand for housing in England, regardless of the tenure.

"Given that around 80 per cent of people in the UK aspire to home ownership and the current rate of ownership is 71 per cent, there is most pressure on the owner-occupied sector."

The increase in June means that the annual rate of property price inflation is now at five per cent, the highest level for over three months.

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