Wednesday, October 31, 2007
A Nationwide surprise
Posted by David Smith at 09:00 AM
Category: Thoughts and responses

House prices have jumped by a strong 1.1% this month and are 9.7% up on a year earlier, according to the Nationwide building society. These figures are considerably stronger than expected and a counterweight to some of the gloom of recent days.

This is the Nationwide's interpretation, from Fionnuala Earley, chief economist:

"House prices recorded a surprisingly strong increase of 1.1% in October, tying it with June for the highest month-on-month growth rate so far in 2007. The average price of a typical UK property was 186,044 in October, 16,421 more than the same month last year. The annual rate of price growth picked up from 9.0% in September to 9.7%, but this is still down from a peak of 11.1% in June and was partly driven by base effects.

"The rise in the annual rate temporarily breaks the slowing in price growth we have seen since June, but is unlikely to mark the start of a new upward trend. November and December saw particularly robust gains in 2006, and unless prices perform very strongly for the rest of this year, the annual rate of price growth will resume a downward path. The 3-month on 3-month rate of price growth - which helps smooth monthly volatility - edged up only modestly from 1.7% to 1.9%, which is still below the average of 2.2% seen so far in 2007."

Comments

I find it beggers belief that NW can come out with this in light of the credit crunch, CML figures and just about everyone else with a vested interest in property, reporting prices / hpi declining.

This report is fit for not much more then the wastebasket.

Posted by: Dan at October 31, 2007 01:51 PM

Not in my neck of the woods they aren't.

Still he who has the levers of the Ministry of Truth.....

Posted by: F.Fox at October 31, 2007 02:42 PM

The housing market data we get is at different stages of the home-buying cycle, so some variation is inevitable. The fact that these figures were out of line with expectations suggests we should treat them with some caution but it also says a lot for the honesty of the data. An unscrupulous producer of data would have massaged the figures lower.

Posted by: David Smith at October 31, 2007 03:34 PM
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