LONDON, Sept 30 - House prices in Britain rose another one percent last month, the Nationwide Building Society said on Tuesday, adding that momentum appeared to be returning to the market after a lull earlier in the year. The September growth figure is very similar to the monthly increases seen in the previous three months but is about half the pace seen in the summer and autumn of last year, bringing the annual pace of growth down to 15.5 percent, the lowest for 18 months. The average price of a house in Britain is now 130,473 pounds ($215,000), the Nationwide said. Its index is one of the main measures of house prices in Britain, a country where two thirds of people own their own homes.
Its quarterly analysis of prices showed an increase of 3.3 percent in the third quarter from the second, down from 4.0 percent in the second quarter and the smallest increase in nearly two years. However, prices were still 21.1 percent higher than a year ago. "It is clear that some momentum has now returned to the market," Nationwide's chief economist, Alex Bannister, said.
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"Some of this relative strength may reflect buyers choosing now to enter the market or trade up, having been put off earlier in the year because of uncertainty in the run-up to the Iraq war and the significant amount of comment about an impending housing market crash," he said. Several other house price surveys have shown a similar picture of a housing market picking up after a slow summer. With prices having shot higher in the last few years, however, some economists are still predicting a sharp slowdown over the next year or so. The Bank of England, which sets the country's interest rates, expects the annual rate of growth to slow to zero over the next two years. The BoE released data on Monday showing that the amount of new mortgage lending slowed to 7.7 billion pounds in August from 8.2 billion the month before. But the figures also showed approvals -- which lead actual lending by a month or two -- leapt to 120,000, the biggest number since October last year. That points to a strong autumn for the market. The Nationwide is predicting prices will finish this year about 13 percent higher than they began it -- a hefty rise but only about half the size of last year's.
Bannister said the north-south divide remained, with London house price inflation down to 8.1 percent in the third quarter from 14.6 percent in the second, whereas in the north of England house prices were up a whopping 31.6 percent on the year, the fastest in the country.//