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House prices rising at fastest rate for four years

posted 28 Feb 2014, 04:58 by Richard White   [ updated 26 May 2015, 04:45 ]

House prices rose by 0.6% in February, a 9.4% increase on the same month in 2013, according to the Nationwide Building Society.  

The annual rate of growth is the fastest for almost four years.

It puts the average price of a UK home at £177,846, which is still almost 5% below the 2007 peak.
The Nationwide said sales and prices were being driven by record low interest rates, higher employment and the easier availability of mortgages.


The lender's chief economist, Robert Gardner, told BBC News "If you look at prices relative to earnings then housing does look relatively expensive by historic standards,"

"But if you look at how much it costs to service a typical mortgage, that suggests that housing isn't overly expensive at this point... because interest rates are at such low levels."

The Nationwide also commented that prices were also being driven higher by a continued lack of new homes.

"Price growth is being supported by the fact that the supply of housing remains constrained, with housing completions still well below their pre-crisis levels," said Mr Gardner.

He added that just 109,500 new homes were built in England in 2013, which was 38% below the level recorded in 2007, and about half the projected number of new households expected to form each year.
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