Housing report offers mixed view

Posted: 30 Aug 2007 11:59:15 GMT

The latest house price index paints a mixed picture of the UK market.

The latest house price index paints a mixed picture of the UK market.

Nationwide has published its house price report for August and it shows that month-on-month prices increased by 0.6 per cent.

This is up on the 0.1 per cent growth recorded last month and shows that things are picking up after a particularly slow July.

However, annual inflation fell in August, from 9.9 per cent in the previous month to 9.6 per cent this month.

"There are now clearer signs of slower demand in the market reflected in the collapse in new buyer enquiries," said Nationwide's chief economist Fionnuala Earley.

"In addition, the stock-to-sales ratio, which leads house price inflation by five to seven months, predicts a continued slowing in the annual rate of house price inflation."

Despite this, Nationwide remains upbeat about inflation for 2007 as a whole, maintaining its forecast of growth between five and eight per cent.

The building society also offered many mortgage holders a glimmer of hope by predicting that the Bank of England will not raise the base rate from its current level of 5.75 per cent.

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