Thu, 28 Jan 16
UK house price growth got 2016 off to a steady start, according to the latest figures from Nationwide.
The lenderís latest house price index shows that house prices increased by 0.3 per cent in January 2016, down slightly from the 0.8 per cent growth recorded in December 2015. The average house price was £196,829, down from the £196,999 recorded in the previous month, but annual growth remained stable at 4.4 per cent, down slightly from Decemberís 4.5 per cent.
Annual house price growth has remained in a fairly narrow range between 3 per cent and 5 per cent since the summer of 2015. Indeed, after the headwinds of the tougher mortgage restrictions and the general election had passed, the market has grown steadily, with price increases driven by a consistent under-supply of stock.
"As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level," comments Robert Gardner,
Nationwideís Chief Economist.
Indeed, improving employment figures continue to fuel confidence among buyers, boosting demand and contributing to the ongoing imbalance between supply and demand.
With interest rates now likely to remain at their record lows, following comments from the Bank of England governor Mark Carney, affordable mortgages are expected to continue supporting demand for homes. As a result, the current trend is forecast to last for some time.
"The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability. Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agentsí books remains close to all-time lows," adds Gardner.
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