House prices show strong growth

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for sale signsHouse prices have recorded their fastest growth in almost three years in a further sign that the market is gathering pace, Nationwide has reported.

The annual increase of 1.9% registered in June pushed average UK prices to £168,941, marking the strongest year-on-year uplift seen since September 2010.
On a month-on-month basis, house prices rose by 0.3% in June, marking a slight slowdown compared with a 0.4% rise recorded the previous month.

The building society said that Government efforts to kick-start the market, as well as a lack of available homes to choose from, are helping to bolster house prices.

However, there are big regional divides, with prices in London now standing at a new all-time high at £318,214 on average, which is 5% above their previous 2007 peak.

Nationwide's chief economist, Robert Gardner, said London "has seen the greatest recovery in prices of any region". By contrast, prices across the UK are still around 9% below their pre-crisis peak. Prices in England are currently 5% lower than those seen in 2007, while they are 13% down in Wales, 12% lower in Scotland and have plummeted by 53% in Northern Ireland compared with their 2007 levels.

Ten out of 13 areas across the UK have seen house prices increase over the last year, while three - Scotland, Northern Ireland and Yorkshire and Humberside - have seen falls.

London has seen the strongest annual growth at 5.2%, followed by East Anglia, which saw house prices increase by 3.6% year on year. Northern Ireland recorded the biggest year-on-year drop in house prices, with a 2.1% fall taking them to £108,116 on average. Scotland saw the second biggest fall, with a 1.2% slide pushing prices to around £134,611. Meanwhile, prices rose in Wales by 1.2% year on year to reach £133,432 typically.

Among England's cities outside London, Newcastle saw the biggest housing market jump year on year, with prices up by 11% to reach £173,296 on average, while Liverpool saw the biggest annual drop, with an 8% slide taking prices to around £142,454.

Mr Gardner said the recent house price jump is likely to be down to a number of factors, including the increase in mortgage availability brought about by the Funding for Lending scheme. Some signs of a modest improvement in the economy may also be boosting buyers' confidence and at the same time there are "few signs" that the supply of housing is increasing significantly, he said.

© 2013 Press Association
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