UK house prices up again in September
The Halifax reports that UK house prices rose for the third consecutive month in September, up 1.6% from August levels. Key to the rise has been a lack of supply coupled with increased demand (100% mortgages have helped as well). Last week, Nationwide had pointed to a rise in ‘accidental landlords’ who did not wish to sell into a soft market as a reason for the limited supply.
Nevertheless, house prices are still 7.4% lower than they were at this time last year, according to the Halifax. What I find curious, however, is that the Nationwide data released last week show house prices flat with year ago levels. Below is a BBC News graph showing the growing discrepancy between the two major UK house price indices.
As in the U.S., I would like to see how these figures hold up in winter time, especially giving the huge disparity in the two indices. Moreover, Britain has shown a considerable degree of economic weakness of late. Manufacturing data released today showed industrial production at the lowest levels since 1987, leading many to believe the UK has yet to shake off a nasty recession. If economic weakness lingers, expect it to also be reflected in home values.
More signs of house price rises – BBC News
House Prices Now At Same Level As September 2008 – Nationwide