Insurance News Archive

Interest rates "take toll" on housing market

Recent interest rate rises are "taking their toll" on the housing market, according to Nationwide's latest house price report.

The group's figures show that house prices rose by 0.7 per cent in February 2007, meaning that the annual house price growth increased to 10.2 per cent from 9.3 per cent in January 2007.

February's increase means that the average price of a house this month has reached £174,706, from £173,225 the previous month.

This represents a £16,000 increase from the same month the previous year, equivalent to a £40 a day rise in value.

Fionnuala Earley, Nationwide's chief economist, speculated that recent interest rate rises were starting to filter through to the market, saying: "Buyer interest and mortgage demand are waning."

However, due to the lack of properties coming onto the market at present, Ms Earley said that house price inflation will "remain firm for a while longer, before gradually easing".

28 Feb 2007