MSE News: House prices show annual increase for the first time in over a year

Former_MSE_Helen

"House prices were up 0.8% on a year ago, marking the first year-on-year rise since February last year, says Nationwide"

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House prices show annual increase for the first time in over a year




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HAMISH_MCTAVISH

All the indices now year on year positive.

While rents are at near record highs and also rising year on year.

harpoboy

This is the concern I have with the budget provisions. Just as the house market starts to recover, the new measures will just increase house price inflation. In my area, house prices are already more than 10% higher than in 2008.

A cynic might say that a rise in house prices over the next few years would help the Tories in 2015

HAMISH_MCTAVISH

harpoboy wrote: »

This is the concern I have with the budget provisions. Just as the house market starts to recover, the new measures will just increase house price inflation. In my area, house prices are already more than 10% higher than in 2008.

The new measures will enable far more people to buy. Which is of course a good thing.

Whether that results in house prices inflation or not depends entirely on supply, and how many houses get built.

We have a massive housing shortage, which is why prices remain high despite the recession and a fall in mortgage lending of 70%.

But you can't fix a housing shortage by rationing mortgages, as the current lowest level of house building in 100 years proves. Mortgage rationing just makes the shortage worse and drives up rents instead.

A cynic might say that a rise in house prices over the next few years would help the Tories in 2015

A rise in house prices will help the wider economy through the wealth effect, will increase the number of houses being built and so help the economy by increasing employment, will reduce negative equity and enable labour mobility as a result, and will allow millions of people to get cheaper mortgages through falling into better LTV brackets at renewal.

But I think it's probably too late for the Tories regardless.