Nationwide News Update: House Prices Rise
Nationwide News Update: House prices rise. The Building Society’s’ figures show that house prices have risen 3.5% in a year, compared to August 2012.
House prices rose 0.6 per cent in August of this year the building society has said and the increase in property prices was put down to measures in place such as the Funding for Lending scheme as well as the Help to Buy scheme that were introduced to try and help people get onto the first rung of the property ladder. Chief Economist for the Nationwide, Robert Gardner said that there were signs that the housing sector was starting to show signs of recovery although he did say that construction was still behind the level that would be needed to meet demand. He warned that if the situation continued with supply lagging behind what is anticipated to be needed then prices were likely to start moving out of reach again.
He said that although house prices were still high compared to the salaries that people earned, very low interest rates were making an impact on what families could afford. The cost of supporting a mortgage for an average house buyer is currently at a level of just below 30% of the disposable income available to pay for it.
The director of mortgage brokers Anderson Harris, Jonathan Harris said that house prices were continuing to rise and that the rise had been driven by increasing confidence in both the employment markets recovery and the economy in general. He said that an increasing number of first time buyers were also fuelling the market as they took advantage of low mortgage and interest rates. He added that so far the price rises in the housing market did not seem to be putting them off. He did warn that if prices continued to rise then it may well have the effect of putting first time buyers off as property prices squeezed them out.
Nationwide News Update
Harris agreed that the government scheme such as the Help to Buy scheme was helping in supplying cheap and affordable mortgages over the months to come but that this was likely eventually to lead to a rise in house prices becoming more pronounced. He also warned that when interest rates finally start to rise many people way find themselves in trouble and he called for those taking on mortgages to be made aware and to understand fully the implications of this possibility so that they did not end up overstretched and risking repossession.
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