Amid higher average price increase in January than expected 1.2%, Nationwide Building Society forecasts that house prices will be on the road to two figures next month for the first time in three recent years. It is expected that the announcement of reports on Monday will underpin the belief that prices have grown stronger. The reports also indicates that basing on signs of better mortgage lending, economists have modified their forecasts in the upward trend.
According to Martin Gahbauer, chief economist for Nationwide, yearly house price inflation would be possibly transformed in double-digit figure the following month if property values did not decline in February.
If this happened, this would be the first time for an annual double-digit increase for almost three years. In May 2007, Britain faced annual house price rise to above 10%. The previous average house price was £147,746 in February, less than the current price of £163,481.
Separate data from the Land Registry indicated that annual house prices the last month of the year rose for the first time since May 2008. London had the greatest annual change while Wales' fell to 2.5%.
Marcus Cooper, the North London developer gave an announcement of attained planning consent for a £100 million home facing Regent's Park, Central London. Camden council agreed to build the 50,000 sq ft property. Redevelopment of the 40,000 sq ft Witanhurst House in Highgate helped earn millions of pounds two years ago. The project of 50,000 sq ft property is among London property professionals amid growing prices and rocketing demand from foreign investors. Some of the biggest developers in London have been eying at dwellings instead of centrally located buildings.
According to Nationwide, the housing market would remain its independence on other economic measures including unemployment and negative wage growth but interest rates from the Bank of England this year.
Mr Gahbauer said that the housing market would face difficulties amid dim future path of interest rate and unsatisfactory real earnings. However, interested rates will be kept firm until the last three months of 2010. Howard Archer, of IHS Global Insight said that a return of house prices is likely at some point in 2010.
