House prices could rise by 10% a year, Nationwide says

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%.  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

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.

Posted at 08:57PM Jan 29, 2010 by Kelly Board in The Economy  |  Comments[0]