Insurance News Archive
House prices maintain 'subdued growth'
The housing market will continue to see slow but sustained price rises, a building society has predicted.
Nationwide's June house price index showed a third month of "subdued growth", with prices rises of 0.3 per cent.
Annual house price inflation rose slightly to five per cent, said the report, with the average price of a house now standing at £165,730.
Longer term, Nationwide predicts that affordability constraints will continue to bite and that supply constraints will continue to support house prices.
Howard Archer, chief UK and European economist from the financial forecaster Global Insight, comments on the Nationwide Price Index: "We have long believed that house prices are likely to see an extended period of relatively modest rises.
"Significantly, already stretched affordability has been adversely affected in recent months by house price inflation moving back well above average earnings growth, and affordability will be pressurised further over the coming months by modest earnings growth and markedly increased utility bills," he said.
"In addition, house buyers will be concerned by the very real possibility that interest rates could increase before the end of the year, as this would further stretch affordability," he added.
Forecasters are predicting a short dip in activity from the property market during the World Cup.
29 Jun 2006