House prices remain bullish despite rate rise: Nationwide |
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Thu, 28 Sep 2006 11:45
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LONDON - House prices in UK continued to climb despite the increase in the interest rates by the Bank of England last month. House prices in September showed an increase of 1.3 percent, according to the latest survey by the Nationwide Building Society.
The average price of a house in the UK is billed at £169,413, over £13,000 more than the price during the same time last year. This month's "unseasonably strong" performance has lifted the annual rate of growth to 8.2 percent, making it the fastest annual growth rate since February 2005. The three-month graph saw house prices increase by 2.2 percent to the months leading to September.
"Just like the weather, the housing market was unseasonably warm in September, as August's interest rate hike [to 4.75%] did nothing to cool the rate of house price inflation. Buyer interest remains robust as estate agents continue to report strong enquiries", said Fionnuala Earley, a group economist for Nationwide. Ms. Earley added that the reason for the sudden surge in property prices could be attributed to fewer sellers willing to put their properties on the market.
Howard Archer of Global Insight concurred saying, "House prices may well see further marked increases in the near term, given the current level of mortgage activity; survey evidence showing strong buyer interest; strong demand from the buy-to-let sector; and a reported shortage of properties in some areas."
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Consumer confidence declines to 17-month low & economy concerns mount 