House and flat prices have risen strongly, according to the latest report by Nationwide.
According to the building society, house prices are now increasing at a rate of 6.5 per cent a year, compared to the 5.8 per cent recorded last month. On average, the price of a house in the UK is £174,566, which is the highest it has been since April 2008 at the height of the global financial crisis. In November, prices increased by 0.6 per cent, which is a bit slower than the one per cent rise seen in October alone.
However, other reports are suggesting that house inflation is lower than this. For example, the Land Registry revealed earlier this week that prices, based on actual sales rather than mortgage approvals, have been rising by 3.4 per cent year-on-year. It is important to note however that the Land Registry figures are just estimates based on a large time lag. The Office for National Statistics meanwhile estimated that price inflation stood at 3.8 per cent.
Furthermore, Nationwide has admitted that prices are still six per cent lower than the market peaks recorded in 2007. Robert Gardner, Nationwide's chief economist, stated that this improvement in figures offered "a brighter economic outlook, which has helped to bolster sentiment," but we are surely not out of the woods just yet.
Industry analysts have suggested that the Bank of England's recent decision to stop the Funding for Lending Scheme for household mortgages from January will also halt the market. Banks have been able to borrow money on a cheap basis if they lend it to households and businesses, but now it will only be used for business lending from 2014.
Nationwide is the second largest mortgage lender in the UK.
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