House Prices Up 9 Per Cent

House Prices Up 9 Per Cent.

Nationwide has released its latest property index for January 2014.

In the month of January, the average price of a home in the UK rose 0.7% to £176,491.

The south east is still leading the way although other regions are also starting to show improvement.

Nationwide’s figures, much in the same way as the Halifax’s index, is based upon house prices purchases that they have been involved with from a mortgage lending perspective.

Comment

This means that house prices for the year to January 2014 has grown by short of 9% at 8.8% for the year.

Market growth is being driven by increased confidence in the economy, huge falls in unemployment and housing shortages.  Demand and supply economics are interlinked driving prices up as well as additional stimuli such as the Help to Buy Deposit Scheme and the Help to Buy Mortgage Indemnity Insurance Scheme.

We suggest house prices will continue to grow in a similar vein this year despite government rhetoric that they plan to control house price increases.  This is a conflict of interest given that the government receives revenue from Stamp Duty Land Tax, it needs property values to increase to reduce toxic debt on state owned bailed out banks as well as Government needing inflation to devalue public sector debt.