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House prices nearly 6% higher than 2012

House prices nearly 6% higher than 2012

Category: Mortgages

Updated: 31/10/2013
First Published: 31/10/2013

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House prices are now 5.8% higher than in October 2012, according to Nationwide Building Society's latest House Price Index.

This brings the average cost of a home in the UK to £173,678. Compared to September, house prices are now 1% higher.

The building society's chief economist, Robert Gardner, acknowledged that Government initiatives such as Funding for Lending and Help to Buy have improved the availability of products as well as helped to lower costs.

"Mortgage rates are close to all-time lows," he added.

However, he pointed out that there is a danger that rising demand for properties will outstrip supply.

"The risk is that if demand continues to strengthen while the supply of property remains constrained affordability could become stretched. Indeed, average wages have continued to decline in real terms even though employment growth has been fairly robust in recent years."

Nationwide's figures come just days after the Land Registry's House Price Index revealed that house prices in September were a modest 3.4% above September 2012's figure, which perhaps dampens fears that a new housing bubble is being created.

The Land Registry also said that the average house price, at £167,063, is still well below the peak of £181,839 reached in November 2007.

Their figures are also considered to provide a more comprehensive picture as they include properties bought with cash and mortgages, whereas Nationwide uses mortgage data only.

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