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| House prices start year with rise | House prices start year with rise |
| (about 2 hours later) | |
| The rate of house price increases could soon rise above 10% a year, the Nationwide building society has said. | The rate of house price increases could soon rise above 10% a year, the Nationwide building society has said. |
| Its latest survey shows that the average UK house price rose by 1.2% in January, pushing the annual rate up to 8.6%. | Its latest survey shows that the average UK house price rose by 1.2% in January, pushing the annual rate up to 8.6%. |
| It means the average UK home now costs £163,481. | It means the average UK home now costs £163,481. |
| Separately, the Land Registry survey revealed that the annual change in property prices showed a rise for the first time since May 2008. | |
| It said that the year-on-year increase was 2.5% in December, following an eighth consecutive monthly rise. | |
| Consecutive rises | |
| The Nationwide said prices had now been rising for nine months in a row, and the rate of increase was the fastest since October 2007. | The Nationwide said prices had now been rising for nine months in a row, and the rate of increase was the fastest since October 2007. |
| "House prices strengthened their upward momentum at the start of 2010, increasing by a seasonally adjusted 1.2% month-on-month in January," said Martin Gahbauer, the Nationwide's chief economist. | "House prices strengthened their upward momentum at the start of 2010, increasing by a seasonally adjusted 1.2% month-on-month in January," said Martin Gahbauer, the Nationwide's chief economist. |
| "Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007," he added. | "Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007," he added. |
| The three-month on three-month rate, regarded as a less volatile measure of house prices, saw prices rise by 2.1% in January, down slightly from 2.3% in December. | The three-month on three-month rate, regarded as a less volatile measure of house prices, saw prices rise by 2.1% in January, down slightly from 2.3% in December. |
| Economic news | Economic news |
| Mr Gahbauer told the BBC the continued rise in house prices was "surprising given the UK economy has been in the deepest recession since the 1920s". | Mr Gahbauer told the BBC the continued rise in house prices was "surprising given the UK economy has been in the deepest recession since the 1920s". |
| The relative lack of supply in the housing market is one of the reasons why prices have continued to rise. | The relative lack of supply in the housing market is one of the reasons why prices have continued to rise. |
| Mr Gahbauer explained that some people were not putting their property on the market because low interest rates were acting as a disincentive. | Mr Gahbauer explained that some people were not putting their property on the market because low interest rates were acting as a disincentive. |
| He said that their interest rate could rise if a new mortgage was taken out for a home move. | He said that their interest rate could rise if a new mortgage was taken out for a home move. |
| "People may have a need to move house but may be on a mortgage that has a very low rate of interest, say 2.5% for some standard variable rate deals," Mr Gahbauer said. | "People may have a need to move house but may be on a mortgage that has a very low rate of interest, say 2.5% for some standard variable rate deals," Mr Gahbauer said. |
| "Relatively few households have been under financial pressure to sell their homes into what remains a relatively weak demand environment," he added. | "Relatively few households have been under financial pressure to sell their homes into what remains a relatively weak demand environment," he added. |
| Regional picture | |
| The Land Registry survey, regarded as one of the most authoritative, puts the price of the average home in England and Wales at £161,783. | |
| ANNUAL HOUSE PRICE CHANGES North East England: -0.5% (£113,818)West Midlands: 2.1% (£135,549)London: 6.1% (£324,352)East Midlands: 1.9% (£127,489)Yorkshire and Humber: 0.1% (£126,145)South East England: 5.6% (£204,275)East England: 3.2% (£171,660)South West England: 3% (£170,940)North West England: -0.9% (£117,959)Wales: -2.5% (£122,024) Source: Land Registry December survey | |
| It showed that detached homes had risen in price the most year-on-year, by 4.5%, although these types of homes were among those that saw the biggest drops during the fall in the housing market. | |
| The Land Registry said that seven areas of England and Wales showed an annual increase in prices, led by London, which showed a 6.1% rise. | |
| However, the North East of England (down 0.5%), the North West of England (down 0.9%), and Wales (down 2.5%), all showed fall in property values year-on-year in December. | |
| Many commentators have suggested that the pace of price increases may ease off this coming year. | Many commentators have suggested that the pace of price increases may ease off this coming year. |
| Activity in the market has been picking up briskly since the spring of 2009. | Activity in the market has been picking up briskly since the spring of 2009. |
| Recent figures from HM Revenue & Customs (HMRC) showed that the number of homes sold in December jumped to a two-year high of 104,000. | Recent figures from HM Revenue & Customs (HMRC) showed that the number of homes sold in December jumped to a two-year high of 104,000. |
| This may have been influenced by buyers rushing to complete their purchases before stamp duty went up again. | This may have been influenced by buyers rushing to complete their purchases before stamp duty went up again. |
| Both the Bank of England and the British Bankers' Association have reported further increases in the number of mortgages being approved - a good short term indicator of future trends in the market. | Both the Bank of England and the British Bankers' Association have reported further increases in the number of mortgages being approved - a good short term indicator of future trends in the market. |