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House Prices Situation: Up 1.4% in November
UK
House Prices Forecast: Continued restricted growth for
next 3-6 months
House
Price Inflation Reaches 21-Month High
Annual
house price inflation soared to a new
high of 9.6% in November, the highest level for nearly
two years. Across Britain, the average house increased
in value by 1.4%, or £41 per day, in November,
according to a report from the Nationwide building society.
Nationwide
economist Fionnuala Earley said that "Looking forward,
current housing market indicators are firm and do nothing
to dent the prospect of further rises
in house prices in the very short term."
Earley
went on to add that a fall in buyer enquiries in September
had suggested the market might be cooling, but that
demand had recovered since then. Nationwide believes
that affordability will dictate future market behaviour,
and that prospects for further significant medium term
increases in house prices are limited.
Mortgage
Borrowing Rises In October
Mortgage
approvals rose to a three-year high in October, defying
analysts' expectations of a modest fall in approvals.
A proportion of these approvals represent existing homeowners
remortgaging before November's widely-anticipated rise
in interest rates, but the
statistics nevertheless suggest continued confidence
amongst home buyers.
Leading
Think Tank Denies Crash Predictions
A
leading economic think tank, the Centre for Economic
and Business Research (CEBR) has published a report
rebutting claims by economist David Miles that a significant
fall in house prices is highly likely.
The
CEBR believes that the combination of a fundamental
shortage of housing stock, particularly in the south-east,
and a growing number of single-occupancy homes will
prevent the bottom falling out of the market. A relatively
low interest rate also means that borrowing
is still fairly affordable as a proportion of income.
A
growing number of other analysts agree that a housing
crash is unlikely unless prompted by more general economic
problems, such as high unemployment or recession.
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