House prices inch higher as average price hits £168,731 - Nationwide

Published 29th Jul 2011

* New rise compares with drop of 1.1 per cent last month
* Sluggish demand helps keep prices stable


House prices inched higher in July as demand and supply both stayed low to keep the market calm, mortgage lender Nationwide said today.

The average price of a house rose to £168,731, up 0.2 per cent from the previous month, and is 0.4 per cent lower than this time last year. That compares with a drop of 1.1 per cent a month ago.

Robert Gardner, Nationwide's chief economist, said: 'Sluggish demand for homes combined with only a relatively gradual rise in the supply of available properties has helped to keep property prices relatively stable.'

House prices have risen or remained unchanged for six of the seven months so far in 2011, with the highest increase being 0.6 per cent in February

House prices have risen or remained unchanged for six of the seven months so far in 2011, with the highest increase being 0.6 per cent in February

Nationwide said the torpor had also affected property transactions with the 204,000 completed deals in the the second quarter of 2011 the lowest total for two years.

On the less volatile three months measure, prices in July rose by 0.3 per cent, also little changed from the previous month.

House prices have risen or remained unchanged for six of the seven months so far in 2011, with the highest increase being 0.6 per cent in February.

Mr Gardner said the stable market partly reflected the uncertain economic climate, but added there had also been evidence of a trend away from ownership, especially among the younger members of the population.

'The trend is part of a reflection of stretched affordability. House prices remain relatively high compared to incomes and together with more demanding deposit requirements this is dissuading or at least delaying some first-time buyers from entering the market,' he said.

In June, the Genesis Housing Association reported that the proportion of people who are homeowners had dropped from a peak of 70.9 per cent in 2003 to 67.4 per cent in 2009/10.

The group said if the current trend continued, only 60 per cent of the population, or 15.5 million people, would own their own home by 2025 - 1.9 million fewer than now, while around a quarter of households would rent their home from the private sector.

Nationwide's latest report suggests prices are rising slower than the index from bank Halifax, which earlier this month reported prices rose 1.2 per cent month on month in June with the average home costing £163,049.

Source: ' ThisIsMoney '

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