Surprising house price growth figures from Nationwide

Written by renxue January 09, 2008 15:22

Amidst speculation of falling house prices over the coming months the Nationwide Building Society has released figures that show house prices rose at their fastest pace in four months during the month of October.

September saw a fall of 0.6% in house prices, which was an unexpected fall according to many experts. However, many have been surprised by the figures released by Nationwide with regards to house price growth in October.

October saw house prices rise by 1.1% from the previous month according to the Nationwide figures, with the average house price now standing at £186,044. The annual rise came in at 9.7% from October 2006, which is a rise on September's figure of 9%. However, officials from the Nationwide have warned that these figures do not mean that house prices will not be affected by the turmoil and chaos on the financial markets.

One research firm expressed its surprise at the Nationwide figures, stating: "It seems at odds with the growing evidence of weaker buyer confidence, slowing mortgage demand and easing house price pressures shown by most other housing market indicators. As such, we would be wary of interpreting today's data as evidence that the housing market remains robust."

An official from the Royal Institute of Chartered Surveyors added: "The endless talk of the demise of the property market is, at the very least, a little premature. The 1.1% gain in prices in October represents the highest month-on-month increase this year and provides a stark contrast to the fears of outright price declines."

A number of factors are thought to be affecting house prices according to Nationwide officials, with one official stating: "Different factors could be driving the low level of instructions, including a reluctance to trade up amid current uncertainties and the fact that low unemployment is limiting the number of forced sales. The overall result is that the stock of unsold homes is still relatively low, and this is providing some residual support to prices," she added.

Tom Smith
7th November 2007