The Nationwide reported the fastest rise in house prices since Dec 2006. In July house prices rose 1.6% to £160,244. The 12 month house price change is now only -2.2%
The rise in prices occured because of the continued low interest rates and shortage of houses for sale.
However, the upturn in the market may encourage many homeowners to start putting their houses on the market. There is a considerable number of homeowners who have been holding off putting their house on the market waiting for market to turn. These homes are known as a shadow inventory. Now, prices have risen for a couple of months, we could see an increase in houses on the market which will moderate price rises and prices could fall if interest rates start to rise again.
Mortgage approvals continue to show signs of recovery with data expected to show further improvement.
1 comment so far ↓
Yeah thats a good point. With all the homeowners who have been holding back due to the recession we could see a major influx, which could result in over supply.
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