House Prices up again Tuesday, 1st December 2009

The Nationwide Building Society said Tuesday that house prices rose for a seventh consecutive month in November, but they remain at levels last seen in early 2006 and the pace of the recovery has eased

Following a revised 0.5% increase in October, the price of a typical home rose 0.5% on a seasonally adjusted basis to £162,764 ($267,779) in November, but those gains were smaller than in previous months.


Martin Gahbauer, Nationwide's chief economist., said "This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows."

But Nationwide said the average house price was still at a similar level to where it was in early 2006.The monthly gain means house prices are 2.7% higher than they were in November last year, the strongest annual gain since February 2008.

But the market still has a long way to recover after being throttled by the global credit crisis and ensuing recession. Sales remain weak.House prices have been squeezed higher since the second quarter by a combination of pent-up demand and a shortage of property for sale on the market. Low interest rates have also helped support the market.

Nationwide said the better-than-expected performance of the U.K. labour market had probably contributed to the surprise rebound in house prices this year, helping to limit the rise in repossessions and distressed sales. "Based on the latest labour market figures from September, it now looks unlikely that the jobless total will reach three million before the year is up," said Martin Gahbauer.