Nationwide says: House Prices on the Rise

Nationwide released the latest house price index this week showing house prices rose by 1.2% in January. This puts the average house price at £163,481 and reflects an annual increase of 8.6%. This is the 9th consecutive month we’ve seen this rise.

Quoted in BBC News, Martin Gahbauer, chief economist at Nationwide, predicts: “unless property values fall next month, annual house price growth will hit over 10% for the first time since May 2007”.

He also points out that although we are seeing this rise, pay cuts and pay freezes, in combination with the higher house prices will make it harder for homeowners and buyers especially when interest rates are not likely to drop any further.

This being the case, we can’t ignore that pay restraints have allowed more people to remain employed and able to make mortgage repayments; both sides of the coin.

It is odd that house prices are on the rise considering the UK is just days out of the recession; however the lower supply of houses on the market has been a result of the economic downturn as well. Funny, these flipping coins…

What does this mean for home buyers?

They should remain abreast of changes in the mortgage market including mortgage rates, deposit requirements, and other lending criteria. Seek advice from a mortgage broker or research on your own but make sure you are educated.

Here are some tips for first time buyers.