According to latest statistics from Nationwide building society house prices have made an unexpected jump for August.
Figures released by Nationwide have shown a 1.3% increase in housing prices. The jump has been the biggest rise since January 2010 resulting in an average UK house price standing at £164,729. Compared to July an average property stood at £164,389 highlighting a 0.7% decrease despite the financial situation the UK is currently in.
Experts have claimed that even though the housing market is changing slightly on a monthly basis the recent figures have shown the market is currently stable. The most dramatic change is the level of activity that is happening as mortgage approval rate is around 50,000 per month, which is half of the activity rate for 2005-2007.
Separate figures from the financial information company Moneyfacts show that a deposit of 20% is still needed for 68% of all mortgage deals. Compared to last year where 64% of mortgages required this deposit highlighting a small increase. This is still a higher deposit compared to three years ago when just 10% was needed to secure a property.
Robert Gardner, Nationwide's Chief Economist, commented on the figures for housing prices: “UK house prices rose by 1.3% in August, the largest monthly increase since January 2010, reversing the declines recorded in the previous two months.
“Given the difficult economic backdrop, the extent of the rebound in August is a little surprising. However, we should never read too much into one month’s data, especially since monthly price changes have been impacted by a number of one-off factors this year, such as the ending of the stamp duty holiday for first time buyers.
“These are factors that cannot be controlled by the usual process of seasonal adjustment.”
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By Amanda Bainbridge