House price growth back in double figures

Posted: 28 Feb 2007 10:38:05 GMT

House prices in the UK have experienced their 12th month of growth in February, the Nationwide property index has shown

House prices in the UK have experienced their 12th month of growth in February, the Nationwide property index has shown.

The cost of the average home rose 0.7 per cent over the month to £174,706, taking the annual rate of growth back into double figures at 10.2 per cent.

The housing society warned that the current growth would slow in the coming months and that there were already signs that three rate rises have curbed new borrowing.

Over the short term, supply and demand imbalances would continue to sustain growth however, said Fionnuala Earley of Nationwide.

"By the second half of 2007, we continue to expect to see a more pronounced slowdown in the annual rate of house-price growth," she said.

"This will be a reflection of higher interest rates and stretched affordability."

Bank of England economist Kate Barker said in a recent interview that supply shortages would take a generation to be resolved across the UK, and in some areas may prove to be intractable.

"The fundamental problem of housing supply will indeed take a long time to solve, and it's unlikely we will see it solved in the south-east," she told Bloomberg.

http://www.aboutproperty.co.uk/news/house-prices/nationwide/nationwide-steady-house-price-growth-in-february-$467099.htm


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