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Annual house price inflation hits double digits

Annual house price inflation hits double digits

Category: Mortgages

Updated: 29/04/2010
First Published: 29/04/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
House prices have increased by more than 10% in the last 12 months, the first time the annual rate of inflation has hit double digits for almost three years.

House prices registered a 1% month-on-month rise in April, and buyers can now expect to pay an average price of £167,802 for a UK property.

This latest increase means that over the last 12 months, house prices have gained 10.5%, the first time annual price inflation has hit 10% or more since June 2007, according to Nationwide.

"The strong rebound in house prices over the last year has taken place within the context of a subdued mortgage market, with the number of mortgage advances across the industry still well down on pre-crisis norms," commented Martin Gahbauer, chief economist at the building society.

The expansion in house prices has been driven by the low levels of stock available, rather than an influx of cash buyers into the marketplace.

"Nonetheless, there has recently been evidence of a slight shift in supply-demand balance," added Mr. Gahbauer, who also predicted a gradual levelling out of recent upward price momentum.

"While the recovery in new buyer enquiries at estate agents offices appears to have petered out, the last few months have seen an increase in the level of new instructions from sellers."

Figures show that house prices are now 10% below the peak of October 2007, while the three month on three month rate of inflation ticked down from 1.5% in March to 1.1% in April – reflecting the 1% decline of values in February.

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