Nationwide Building Society says that UK house prices went up by .8% in July which means that prices are now 3.9% higher than they were in July a year ago.
This adds up to the strongest annual rate of house price growth since August 2010. Prices are up quite a bit in just one month- in June 2013 the monthly increase was .3% compared to .8% in July.
This supports what most commentators have been saying recently- the housing market has come back to life in a big way. Many are warning that a bubble could be building up and if it bursts it could be a painful experience – especially if you are one of those borrowers caught out by a sharp rise in your mortgage payments each month if and when interest rates go up. Most of our landlord insurance clients are probably pleased to see prices increasing because they already have a house or houses so can sit back and enjoy the sensation of assets that are going up in value. Some landlords on the other hand will be looking to buy more properties and will be concerned about being priced out of the market. Any landlord with a mortgage will be worried about the risk of interest rates increasing. Even fixed rate mortgages come to an end some time.
The typical home in the United Kingdom is now worth just over £170,000 and prices are now roughly 12% higher than the lows we saw a few years ago.
Only a few months ago the market outside London seemed to be stuck in the doldrums. What has caused to recent resurgence of the property market? Nationwide’s Chief Economist Robert Gardner commented:
“Signs of a modest improvement in wider economic conditions and further modest gains in employment are likely to be lifting buyer sentiment. An improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures such as the funding for lending and Help to Buy schemes, are also boosting the demand for homes”.
If you would like to look a Nationwide’s figures in greater detail visit their website www.nationwide.co.uk/mediacentre
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