Continued increase in property prices
September 4, 2009
Recently released figures have shown that there has been a continued increase in property prices in the UK Officials from the Nationwide Building Society have said that house prices have now risen for the fourth month in a row, and have climbed by around 1.6 percent.
This brought the average property price for August to £160,224 compared to £158,871 for the month of July, according to the figures from Nationwide.
The data shows that the annual rate of decline on property prices has dipped to 2.7 percent for August, and this compared to an annual rate of 6.2 percent in July.
Officials have said that whilst property prices are still lower now than the same period a year ago the rate of decline is starting to slow by significant levels.
One of the major factors that is said to have contributed to this, according to Nationwide officials, is the base interest rate, which is still at all time lows of just 0.5 percent.
One official from the lender said that many homeowners were enjoying a little more breathing space as a result of the all time low base rate, and he said: “The fall in debt serving costs has meant that fewer homeowners are under immediate financial pressure to sell than might have been expected in a recessionary economic background with rising unemployment.”
However, he also cast doubt on sustainability, as once the economy improves interest rates are likely to start rising again. He said: “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.”
Officials from the Bank of England, however, have indicated that there was a good chance that the base rate could remain low for quite some time yet.
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