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House prices up by £10,000 in 2009

House prices up by £10,000 in 2009

Category: Mortgages

Updated: 27/08/2009
First Published: 27/08/2009

MONEYFACTS ARCHIVE
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 It is now over 6 months old so the content may be out of date.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 increased again this month, meaning the average value of property in the UK is now almost £10,000 more than it was at the beginning of the year.

Prices rose for the fourth month in succession, increasing by 1.6 per cent, compared to July's average of £158,871.

Now standing at £160,224, average values have increased by the best part of £10,000 since January, when the asking price for UK property was adjudged to be £150,501 on average, by the Nationwide's House Price Index.

The latest improvement means that the annual rate of decline in the property sector has slowed markedly, with average prices down just 2.7 per cent compared to August 2008, when the typical asking price was £164,654.

The rate of decline last month was 6.2 per cent.

The recent upturn is reflected in the three month on three month comparison, which is not as volatile as monthly comparisons. The measure rose from 2.7 per cent in July to 3.3 per cent in August – the highest level since February 2007.

Martin Gabhauer, Nationwide's chief economist, said exceptionally low interest rates offer some explanation as to why property prices have not continued to fall sharply as they did at the end of last year.

This is because many home owners on tracker or variable rate mortgages have seen the level of their monthly mortgage payments decrease significantly, meaning less have been under pressure to sell.

This lack of supply has helped stabilise the decline in the market.

However, looking forward to the eventual rise in interest rates, he warned: "The eventual exit from exceptionally loose monetary policy could make the recovery in the housing market bumpier than some might expect after the last few months of price increases."

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