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Nationwide says housing market &#39not overheated&#39 despite record price rises

House prices are rising at a record rate, with the average home now costing £100,473 – £14,000 more than last year – according to the latest house price index from Nationwide.

House prices went up by 3.4 per cent in April, says Nationwide. The annual increase is 16.5 per cent.

However, the building society says the market is not becoming overheated and compares favourably with the 1980s. It says a typical property is now worth five-and-a-half years&#39 worth of a buyer&#39s take-home pay compared with seven years&#39 worth at the end of the 1980s.

Since 1996, the price of an average property has increased by almost £50,000 or 11 per cent a year. Mortgage interest rates are still very low, meaning repayments account for less than 25 per cent of take-home pay compared with 58 per cent at the end of the 1980s.

Group economist Alex Bannister says: “With mortgage rates set to remain relatively low in the next few years, it is likely house prices could be even higher without major concerns. We expect a steady pattern of economic growth for this year accompanied by low inflation and interest rates nudging back up towards 5 per cent.”


BA shuts final salary schemes

British Airways has announced that it is shutting its two defined benefit pension schemes to new members blaming FRS17, poor stock market returns and increases in life expectancy.BA found that under the new calculation the shortfall was £394m in the two schemes which have combined assets of around £10bn. It has yet to release details […]

Get the know-how on the knowledge economy

The knowledge economy is the theme of this month&#39s Institute of Financial Services&#39 seminar, Winning through Knowledge (Part II): Creating Value in Financial Services.The seminar, being held in association with Xerox, offers the opportunity to discuss key strategic issues to innovate and create value.It will address subjects such as the shape of the knowledge economy […]

Rathbones – Ethical Bond Fund

Wednesday, May 8, 2002 Type: Unit trust Aim: Income by investing in ethical investment-grade bonds Minimum investment: Lump sum £1,000, monthly £100 Investment split: 100% in ethical investment-grade bonds Yield: 6.2% gross a year Isa link: Yes Pep transfers: Yes Charges: Initial 4%, annual 1.25% Commission: Initial 3%, renewal 0.5% Tel: 020 7399 0399

CML calls for &#39proportionate and cost-effective&#39 approach

The Council of Mortgage Lenders is urging the Government and the FSA to take a “proportionate and cost-effective” attitude to mortgage regulation rather than merely mirror the rules for investment business.In its response to the Treasury&#39s Regulating Mortgages consultation paper, the CML says wherever regulation proposes to go further than the existing mortgage code, the […]

Large-cap growth alpha thesis: seeking risk-adjusted excess returns

Content supplied by Loomis, Sayles & Company — an affiliate of Natixis Global Asset Management For mutual fund investors and managers of large pensions or endowments, a major challenge is to identify those portfolio managers who are most likely to deliver superior risk-adjusted returns in the future. Understanding how an investment philosophy informs a manager’s decision […]


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