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Annual house price growth in the UK edged up to 5.2% in April from 5.1% in March, according to the latest index from the Nationwide building society. The data from the leading lender also shows that house prices rose by 1% in April, taking the average price of a home to £193,048. This is the largest monthly increase since June 2014 and as a result the annual pace of house price growth increased for the first time in seven months, Nationwide chief economist Robert Gardner pointed out. He explained that the pick-up in price growth has occurred even though the pace of activity in the housing market has remained fairly subdued in recent months. ‘Indeed, the number of mortgage approvals is still well below its long run average and 20% below the levels recorded in early 2014. The strength of the economy and relatively subdued pace of activity in the housing market remains something of an anomaly,’ said Gardner. ‘It is possible that heightened uncertainty ahead of the election is weighing on activity, though there is no compelling evidence from previous UK elections to suggest a strong impact. Healthy labour market conditions and continued low mortgage rates should help underpin housing demand in the quarters ahead,’ he added. The Nationwide has also been looking at how the UK housing market compares to the rest of the European Union. ‘The UK is often characterised as a nation of home owners, though compared with our European neighbours, the proportion of the population owning their own home is not particularly high. In fact, it is actually towards the lower end of the range,’ Gardner said. He pointed out that although some other European nations have seen declines in their home ownership rates in recent years, the movement in the UK has been more pronounced. ‘That said, even at its all-time high of 73% in 2007, the UK home ownership rate was not particularly high by EU standards,’ he explained. ‘Since then, there has been significant growth in the private rental sector. Interestingly, while the UK home ownership rate may not be particularly high, the propensity for young adults aged 18 to 34) to live with their parents is relatively low, a trend which has become more pronounced over the past five years,’ he added. Continue reading →
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