Double-digit annual growth in UK house prices

The Nationwide House Price Index for April 2010 reports that house prices increased by 1.0 per cent month-on-month in April. Annual rate of price inflation moves into double digits for first time since June 2007, but house prices are still 10.0 per cent below the October 2007 peak.

The annual change in house price inflation has now reached 10.5 per cent, up from 9.0 per cent in March. The average house price for April 2010 was £167,802.

Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said: “The price of a typical UK property rose by a seasonally adjusted 1.0 per cent month-on-month in April, leaving house prices 10.5 per cent higher than a year earlier. Over the lifetime of the last Parliament (May 2005 to April 2010), house prices have risen by 6.7 per cent. This compares to a 13.5 per cent increase in the consumer price index, the official target measure of inflation.

“April’s figures were the first double-digit annual growth in UK house prices since June 2007. The year-on-year rate in this month’s figures, however, received an additional boost from the fact that April 2009 was one of the weaker months last year.
Given the very strong performance of house prices from May 2009 onwards, it will take monthly increases in excess of 1 per cent for the annual rate of inflation to be maintained in double digits going forward. The smoother three month on three month rate of inflation edged down further from 1.5 per cent in March to 1.1 per cent in April, which primarily reflects the impact of February’s 1.0 per cent decline in house prices. April’s figures leave UK house prices exactly 10 per cent below the October 2007 peak.”