Nationwide reports 1.2% rise in house prices in January

Permalink: Nationwide reports 1.2% rise in house prices in January
by Kay Murchie

The latest house price index from the Nationwide Building Society has revealed a 1.2% rise for the month of January compared with December.

The latest price gain takes the annual increase to 8.6% with the average UK home costing £163,481.

According to the Nationwide, it was the ninth consecutive month that property prices have risen and the building society is predicting that year-on-year prices would exceed the 10% mark next month.

Many analysts have been surprised by the strength in house prices over the last six months or so after several leading experts had predicted falls of around 10% for the 2009 year.

However, house prices rose in the latter half of the year as a result of higher demand and a shortage of properties up for sale.

The housing market is one are that has recovered well in the struggling economy. Official figures earlier this week revealed that the UK economy grew by 0.1% between the October and December period, suggesting that the economy has finally emerged from its worst recession since records began in 1955.

However, economists had expected growth of around 0.4%.

Meanwhile, returning to the Nationwide, Martin Gahbauer, chief economist, said: “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.”

In related news, a survey by property website, Rightmove, unveiled growing confidence within the housing market.

The group found that over half of Britons (53%) believe property prices will increase over the next year - compared to just 10% this time last year.