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UK house prices rose 5.9 pct in 2009, bank says

UK house prices rose 5.9 pct in 2009, bank says

U.K. house prices rose 5.9 percent in 2009, a major mortgage lender said Thursday, but analysts expect the market to slow down next year.
Average prices rose 0.4 percent in December compared to November as the rate of increase moderated, according to the Nationwide Building Society, Britain's third-largest mortgage lender.
The buoyancy of the house market in a year of a deep recession was surprising, but prices have been supported by factors unique to the downturn, including record low interest rates and fewer homeowners attempting to sell.
"This year's recovery has to some extent been driven by transitory factors and there are reasons to believe that it will lose momentum over the coming year," said Martin Gahbauer, Nationwide's chief economist.
"At the same time, there is no obvious catalyst on the near-term horizon that would trigger significant renewed falls in prices, such as a sharp spike in interest rates or a further pronounced tightening of credit conditions from present levels."
The average house price in the U.K. is now 162,103 pounds ($261,600), Nationwide said.
House prices in London rose 7 percent during the year and the capital's outer metropolitan region did nearly as well with a 6.4 percent gain.
Prices rose 1 percent this year in Scotland, were marginally lower in Scotland and down nearly 7 percent in Northern Ireland, the bank said.
However, the lender noted that house prices are still 12 percent below the peak in October 2007.
The Royal Institute of Chartered Surveyors said in mid-December that it expects house prices to rise modestly in 2010 in the first half of 2010. Though more houses are coming on the market, the Institute said, the numbers are not yet keeping pace with demand.
The government's tax break on homes selling for less than 175,000 pounds ends with the new year, and a levy of 1 percent will be imposed on all sales of more than 125,000 pounds. Home sales between 250,001 pounds and 500,000 will continue to be taxed at 3 percent.
David Smith, senior partner of the Carter Jonas property consultancy, said the uncertainty surrounding a national election in the first half of next year and the likelihood that more owners may be forced to sell "will act as a glass ceiling on prices."
"A stabilization in price growth, however, should be welcomed as a property market that outpaces the economy is positioning itself for a fall," Smith said.
"Like Nationwide, we believe house prices will be much the same at the end of 2010 as they are now."
House prices reported by Halifax, the nation's biggest mortgage lender, have also risen. Each bank's report is based on its own lending.


Updated : 2021-02-27 15:45 GMT+08:00