Nationwide figures show housing market recovery “Firmly established”
This week Nationwide published data showing that average house prices rose by 9.2% in the UK for the year up to March 2014. Robert Gardner, Nationwide’s Chief Economist, suggested that this was an indication of “Tentative signs of moderation”.
Meanwhile, the gap between the house prices in London and those around the rest of the country has hit a record high – the average house price in London is now at £362,699, which is more than twice the general average of £180,264,000 maintained throughout the rest of the UK.
March 2014 saw 15th successive month of house price increases, however it must be said that the rate of increase is not so great as it was, going down from 0.7% in February 2014 and 0.8% in January of the same year.
Gardner added that the annual price growth was “Continuing to run at a robust pace” and indicated that the low mortgage rates coupled with an improved economic forecast means that the housing market recovery is now “firmly established”.
House values for the capital rose by a huge 18% in quarter one, when compared to the same quarter in 2013. London prices are now 20% up on the peak reached in 2007. Robert Gardner stressed that “The gap between house prices in London and the rest of the UK is the widest it’s ever been”, however, The Nationwide did add that it had experienced house prices in all UK regions grow for another quarter – the third such increase in a row. Figures are based data from the lenders own samples and are not necessarily the same as data from other lenders.
Nationwide expressed some concerns about there not being enough new build properties on the market in order to satisfy the increasing demand. New builds are currently 40% below the pre-crisis level.
Other figures released by some of the UK’s largest banks now show that mortgage borrowing is at its highest since August 2008 and this is widely attributed to the ‘Help to Buy’ scheme. George Osborne has confirmed his plans to continue and extend the first phase of the Help to Buy scheme until the end of the decade. Although the bank of England has warned that the scheme could create a housing market bubble and is keen to show more caution.
Read the BBC News article for more on this story.