The annual rate of house price increase could rise to as much as 10 per cent per year, according to a new survey published today.
The figures, compiled by Nationwide, show that the annualised rate of increase is now 8.6 per cent, after average property prices rose by 1.2 per cent during January. The average house now costs £163,481.
The annualised rate of increase is now at its highest since October 2007, and looks set to continue rising. There have now been nine consecutive months of price rises, and Nationwide expects to see "double-digit" growth during February.
But the quarterly survey, in which the last three months are compared to the previous three months, showed the rate of increase declining slightly. According to this measure prices rose by 2.1 per cent in January, compared with 2.3 per cent in December.
The increase in prices is partly attributable to a continuing lack of supply. A relatively small number of properties are currently on the market, due in part to a general view amongst householders that they will not be able to secure a suitable price. Others are unable to secure an extension to their mortgage in order to move into a larger property.
Recent figures have also shown increases in mortgage approvals - a sign that the property market may be easing.
