House prices hit nine-year low even as interest in property market surges |
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Thu, 29 Sep 2005 19:05
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LONDON - House prices continued their slide in September even though the number of people interested in the property market as well as the mortgage lending increased in the same month, according to the latest report from the Nationwide building society.
UK’s biggest building society's monthly house price survey found that house prices in September fell by 0.2 percent as compared with those in August. These figures forced the annual rate of growth to its lowest level in more than nine years. The annual increase hit its lowest level since May 1986 and slid to just 1.8 percent. However there was good news for first time buyers since the house price rise is well below the concurrent increase in wage growth making houses more affordable to this segment.
Nationwide's group economist, Fionnuala Earley commented that their monthly data since the start of this year has been pretty mixed, "with several months of small falls and rises, but looking at changes over three months shows the underlying trend more clearly. House price growth stalled in the three months to September, with no increase on the previous three months. Yet house prices are still higher than at this time last year."
The average price of a house in the country was £156,517, a marginal increase as compared to £153,727 at the same time last year. Ms Earley pointed out that the relatively low level of inflation had served as a buffer and had kept the borrowing costs under control, "This may help to explain why we have seen a surprisingly swift return of buyers to the market," she said.
These comments were substantiated by the data from the Bank of England, which showed that the number of mortgages approved in August for purchasing property was 107,000. This was almost 8,000 more than the previous month and easily beat the average of 94,000 in the last six months. "Estate agents have consistently reported increased buyer interest over the last few months, which should help to support the market going forward," Ms Earley concluded.
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