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UK house prices edge up despite weak economy

The price of a typical UK home is now £166, 022 – compared to £1,891 some 60 years ago.

 
UK house prices edge up despite weak economy

UK house prices edged up 0.3% in May, according to Nationwide.

Compared to this time last year, however, prices are down 0.7%. This is however a modest fall given the UK economy slipped back into recession in the first quarter of 2012 and has shown few signs of a significant pickup in economic activity since the start of Q2, said Nationwide.  

‘Over the last eighteen months, house prices have been fairly stable despite the challenging economic backdrop,’ said Robert Gardner, Nationwide’s chief economist. ‘May’s data provides some comfort that this pattern is being maintained.’

Despite subdued demand on the back of weak labour conditions, meanwhile, the lack of homes coming onto the market is providing support for prices, Gardener explained.  

This is in part a reflection of the low rate of building in recent years – any efforts to reinvigorate the housing market should focus on the demand and the supply side of the market, he added.

The price of a typical home is now £166, 022, up from £1,891 in 1952 when Nationwide first produced its house price index – the same year the Queen came to the throne.

In comparison to an 88 fold increase in house prices, the cost of goods and services have recorded a more modest 25 fold increase over the past 60 years.

Earlier this month property website Hometrack reported a 0.2% increase in house prices, boosted by strong sales in the capital.

3 comments so far. Why not have your say?

Michael Peters Fenwicks

May 31, 2012 at 12:48

Only very high quality properties sensibly priced have seen minor increases otherwise doom.

Where is the money coming from when the economy is on shaky legs ????

No talk of bonus talks yet for all city pierre de terres for sale.

I wonder why?????

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Striker

May 31, 2012 at 17:52

Stock Markets are shaky, Savings accounts return virtually nothing, Pension annuity rates are a joke. Inflation is all around. Let's invest then in something solid; Gold? Don't think so - beyond most peoples understanding. Art and Fine wines - err, probably not unless you're a blue blood. Property - yep, now there's a tangible asset always in demand and likely to remain so. Such sentiment will continue to underpin property prices (at least in London & the South-East). The next property boom is not "if", only "when"!

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Rightcharlie

Jun 01, 2012 at 04:57

I rented a brand new home, purchased by the landlord for £249k. I could, if I had wished, have purchased the showhome (same size) complete with furnishings for £225k. One year later, my neighbour, late twenties/early thirties was convinced his property was worth £275k! But on what grounds? Shere indoctrination, that's what!! When his property was valued at £220k his plans where shattered and he was in denial. Because I had been offered the show home (a choice of two by the way, both at considerable discount) I was well aware of reallity. Property is not a one way bet, ask anyone in Spain. But what amazes me, is the lack of realism property owners have, and it can only be blamed on the press and the baby boomers and ever greedy estate agents! People need to loose this obsession and wisen up, the good times are over!!

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