Cost of average 3-bed semi rises to £217,000 as prices hit new high
HOUSE prices have hit another record high, with the cost of a typical three-bedroom semi now just over £217,000, says Nationwide building society.
Values were up by 2.5 per cent in the year to July, compared with a two per cent increase in June, after the property market recorded annual and monthly rises.
By SARAH O’GRADY SOCIAL AFFAIRS CORRESPONDENT
PUBLISHED: 04:08, Thu, Aug 2, 2018 | UPDATED: 04:18, Thu, Aug 2, 2018
Robert Gardner, Chief Economist Nationwide
Prices were also up 0.6 per cent month-on-month in July, after a 0.7 per cent upturn in June.
There is also good news for mortgage payers, says Nationwide.
The Bank of England is due to announce its latest interest rate decision today, with speculation of a rise from 0.5 to 0.75 per cent.
But Nationwide and other experts say any rise is likely to have only a modest immediate impact on borrowers because most are locked into cheaper fixed-rate deals.
Mark Harris, of mortgage broker SPF Private Clients, said: “Many borrowers have been taking advantage of competitively-priced fixed rates and protecting their monthly payments against future rate rises.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, predicted that “relatively few” mortgage borrowers would be affected immediately.
Household budgets have been under pressure for some time because wages have not been rising as fast as the cost of living.
Nationwide’s chief economist Robert Gardner said it expected house prices to increase by one per cent over this year.
He said annual house price growth had remained at two to three per cent over the past 12 months, “suggesting little change in the balance between demand and supply in the market”.
He said: “Providing the economy does not weaken further, the impact of a further small rise in interest rates on UK households is likely to be modest.
“This is partly because only a relatively small proportion of borrowers will be directly impacted.”
But he warned: “It is important to note that household budgets have been under pressure for some time because wages have not been rising as fast as the cost of living.
“In real terms, wage rates are still at levels prevailing in 2005.”
Sam Mitchell of online estate agent Housesimple.com, believes next month will be a true barometer of housing market health.
“Buyer and seller activity is likely to pick up significantly in a month or so,” he said.
“September is generally a very busy period for the housing market and sets the tone for the rest of the year.
“We should also get a better idea how buyers and sellers are feeling and whether the likely small rise in interest rates has had any immediate impact.”
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