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House prices continue to rise

House prices rose by 0.5 per cent for the second month running, the seventh consecutive rise, according to Nationwide.

The building society says house prices have now risen, on average, 2.7 per cent over the last 12 months. Its latest house price index found that the average house price rose to £162,764 in November, up from £162,038 in October.

Nationwide says the average house price is now at early 2006 figures, but says that the three month on three month data, which is a good indicator of general trends, is levelling out compared to earlier in 2009.

Nationwide chief economist Martin Gahbauer says while unemployment is still rising, it is unlikely it will reach the 3 million mark by the end of the year and has yet to have a significant impact on the housing market.

He says: “The outlook for the housing market remains crucially dependent on labour market conditions, and here recent developments have been somewhat more encouraging than might have been expected.”

Carter Jonas head of research Catherine Penman says:  “The November Nationwide data adds to the growing feel-good factor around the residential property market.

“House prices continue to defy the odds given the uncertain economic environment. But we are very conscious that more people lose their jobs exiting a recession than going into one so the next six months will be crucial.

“Two factors have been responsible for the increase in house prices during 2009. Earlier in the year, the driver was affordability, as properties and mortgage finance were available at historically very low price levels, thus stimulating demand. From the summer onwards, the rebound in prices has been more supply than demand-driven, a result of the sheer lack of stock.

“Despite improving economic data and sentiment, prices are likely to remain stable in 2010, especially prior to the general election, when caution will remain the watchword.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Isn’t this actually the average price paid for a house rather than the average value of a house?

  2. I believe the value of an article is indeed that which someone is willing to pay for it!

  3. Evan, I think you will find a house is worth what someone will pay for it. Outside of this, the value is notional, although accounting rules allow a ‘valuation’ figure to be inserted into a balance sheet to determine profit or loss. While on the subject of the imaginary, have you ever been asked to dig half a hole?

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