Another good month for property inflation

Posted: 30 Mar 2006 16:18:35 GMT

            Property News - Another good month for property inflation

House prices were on the rise again this month, according to figures released from the Nationwide building society.

The report claims that prices rose at an average of 1.1 per cent to £162,083, following no improvement in February.

On twelve months ago, prices are up an impressive 5.3 per cent, the best year on year increase since May of last year, following a 3.7 per cent improvement in February.

However, Nationwide believes that the strong growth is unlikely to continue, with tax rises and soaring utility bills likely to slow interest.

"Utility and council tax bills are rising and on top of this, affordability continues to be squeezed as house prices rise further," the firm said in a statement.

"Even in a market with historically low interest rates ... there is a limit to the proportion of income that borrowers will feel comfortable spending on their housing."

Many analysts are waiting to see whether the Bank of England will alter the current interest rate of 4.5 per cent before making property predictions.

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