Nationwide predicts house price rise in 2007

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Nationwide predicts house price rise in 2007

Thu 14th Dec 2006

The price of the average property in the UK will soar by £14,000 next year should inflation reach eight per cent, according to Nationwide Building Society.

An average house in Britain is currently £172,185, meaning that should the prediction become a reality, this will rise to £186,000.

Factors such as a buoyant economy coupled with a property shortage has moved the building society to make this prediction.

"Increasingly poor affordability and likely cutbacks at the Bank of Mum and Dad will cause the rate of house price growth to move back into single digits in the latter part of the year," said Fionnuala Earley, group economist at Nationwide.

London is set to lead the way in terms of house price rises due to huge amounts of city bonus cash and the regeneration of the east of the capital for the 2012 Olympic Games.

Even though the Bank of England has raised the base rate twice in 2006, this does not seem to have dampened the housing market. London and the south- east are expected to see a ten per cent rise in prices compared with three to four per cent in the north and the midlands.

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