Nationwide reveals 1.3% rise in house prices

11:52 | 30.07.09

The three-month on three-month increase of 2.6% is the highest since February 2007. This takes the average house price to £158,871.

However, house prices are still 6.2% lower that 12 months ago.

Martin Gahbauer, chief economist at Nationwide, said:

‘For the first seven months of 2009 as a whole, prices have risen by a cumulative 1.3%, suggesting there is now a reasonable chance that prices could end the year slightly higher than where they started. Only a few months ago, such an outcome would have appeared unthinkable.’

He said the number of households is still projected to expand by an annual average of 153,000 units through to 2031.

‘Based on recent levels of housing starts, it looks likely that only around 100,000 homes will be built during 2009, which would represent by far the lowest level on record (since 1991)

As it is likely to take time for the economy and housing construction to recover to pre-crisis levels, the potential exists for a considerable housing shortfall to develop over the next few years,’ said Gahbauer.

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