House prices go up in March, says Nationwide |
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Thu, 30 Mar 2006 09:55
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LONDON: House prices rose 1.1 per cent in March, making the annual increase at its highest, according to seasonally adjusted data compiled by mortgage lender Nationwide building society. This is indicative of a firm recovery in the housing sector, Nationwide said Thursday.
Year-on-year, the prices have risen 5.3 per cent in March, the biggest annual increase since May 2005, Nationwide said. February accounted for a 3.7 per cent increase.
The average price of a house in the country rose to 162,083 pounds.
Nationwide expects the house prices not to grow at such a rate in future in view of the increase in fuel bills and taxes, which have impacted incomes and spending capabilities of people. It said besides the increase in utility and council tax bills, increasing house prices creates a question of affordability.
Meanwhile, official data Wednesday indicated that the housing market may cool in the coming months. The Bank of England said approvals for home purchases fell in February for the first time in over a year and mortgage lending increased less than expected.
Corroborating this view, Martin Ellis, chief economist at Halifax, said house prices will rise barely any faster than wages as the economy shook off the effect of the late 1990s boom. He said he expected the house prices to rise broadly "in line with average earnings over the next 10 to 20 years, plus a bit extra to reflect the failure of house building to keep pace with household formation". The prices may go up by 3 per cent this year as rising bills made mortgages less affordable, he said.
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Property market firms up; average asking price crosses £200,000 