Prices edge up further in November
Commenting on the figures Martin Gahbauer, Nationwide’s chief economist, said: "The monthly rate of house price inflation was unchanged in November at a seasonally adjusted 0.5 per cent, leaving the average price of a typical property 2.7 per cent higher than a year earlier. At £162,764, the average house price is at a similar level to where it was in early 2006. The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – dropped to 2.8 per cent from 3.5 per cent in October and 3.8 per cent in September. This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows.
"Despite continued uncertainties about the future, the better than expected performance of the labour market has probably contributed to the surprise rebound in house prices this year. Even though workers who have been forced from full-time employment into part-time work will have experienced a reduction in income, the impact has been less severe than it would have been if they had lost their jobs completely. Together with the fact that mortgage rates have fallen sharply as a result of base rate cuts, this has meant that far fewer borrowers have fallen into arrears than would normally be the case in such a deep recession. In fact, the percentage of borrowers in arrears across the mortgage industry has even edged down slightly in the most recent quarterly figures (chart 3). As such, the downward pressure on house prices from distressed sales has so far been significantly lower than expected."
Date: 2nd, December, 2009
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