The latest house price survey from Nationwide indicates prices are inflating at a rate not seen sinc...
The latest house price survey from Nationwide indicates prices are inflating at a rate not seen since the 1980s.
Hour prices are rising an average of more than 2% per month according to the latest figures, or nearly 18% annually.
Nationwide says the latter figure is the higher annual rate since 1989 and is going hand-in-hand with higher lending figures and sales completions.
Unlike recent surveys indicating that the buy-to-let market may have run its course for the time being, Nationwide says its survey indicates there is still plenty of strength left in the housing market.
It says consumers seem more willing to take on debt that will not erode as quickly as it did in the 1970s and 1980s when higher inflation reduced the value of loan debt more quickly.
In turn, Nationwide says, this means people will accept house price inflation being higher than cost of living inflation.
House price inflation will drop back to between 4%-5% annually, but it will take some time before this happens as there is still plenty of pent-up demand in the market with relatively full employment and the continued low cost of borrowing.
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