UK House Price Rises To Hit 10% A Year!

The rate of house price increases could soon rise above 10% a year, the Nationwide building society has said.

Its latest survey shows that the average UK house price rose by 1.2% in January, pushing the annual rate up to 8.6%.

It means the average UK home now costs £163,481.

Separately, the Land Registry survey revealed that the annual change in property prices showed a rise for the first time since May 2008.

It said that the year-on-year increase was 2.5% in December, following an eighth consecutive monthly rise.

Consecutive rises for nine months

The Nationwide said prices had now been rising for nine months in a row, and the rate of increase was the fastest since October 2007.

"House prices strengthened their upward momentum at the start of 2010, increasing by a seasonally adjusted 1.2% month-on-month in January," said Martin Gahbauer, the Nationwide's chief economist.

"Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007," he added.

The three-month on three-month rate, regarded as a less volatile measure of house prices, saw prices rise by 2.1% in January, down slightly from 2.3% in December.

What's Happening Around The UK?

The Land Registry survey, regarded as one of the most authoritative, puts the price of the average home in England and Wales at £161,783.

It showed that detached homes had risen in price the most year-on-year, by 4.5%, although these types of homes were among those that saw the biggest drops during the fall in the housing market.

The Land Registry said that seven areas of England and Wales showed an annual increase in prices, led by London, which showed a 6.1% rise.

However, the North East of England (down 0.5%), the North West of England (down 0.9%), and Wales (down 2.5%), all showed fall in property values year-on-year in December.

Many commentators have suggested that the pace of price increases may ease off this coming year.

Activity in the market has been picking up briskly since the spring of 2009.

Recent figures from HM Revenue & Customs (HMRC) showed that the number of homes sold in December jumped to a two-year high of 104,000.

This may have been influenced by buyers rushing to complete their purchases before stamp duty went up again.

Both the Bank of England and the British Bankers' Association have reported further increases in the number of mortgages being approved - a good short term indicator of future trends in the market.

Move quickly to benefit from lowest prices, says Rod Thomas

Since last Autumn we've been saying that UK house prices have bottomed out and that the window of opportunity to invest at the cheapest part of the property cycle is now closing. If you needed more evidence that this is true then read this article closely and look at the data. Nationwide consider that we could soon hit 10%+ price growth which is actually quite extraordinary. I reiterate my previous advice - buy NOW to benefit from the best bargains!

Posted in Property Prices

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