Cheap mortgages could boost housing market
Thu, 01 Jun 2006
New figures from Nationwide show a small rise in property prices as consumers continue to seek out the best cheap mortgage deals.
The figures showed that prices in May rose by 0.2 per cent, following on from April's 0.1 per cent increase.
This slow rise means that house prices are just 4.7 per cent higher than the same point in 2005, with the average UK house worth £164,632. However, many wannabe homebuyers are still trying to afford to step on to the property ladder by shopping around for an cheap mortgage.
It is expected that forecasted below average growth may force many home loan providers in to ensuring they offer a wide range of cheap mortgage deals in order to encourage buyers back in to the market.
"Activity this strong was last seen when house price inflation was in double digits two years ago," said Fionnuala Earley, Nationwide's group economist.
"Apart from well-known concerns about stretched affordability among first-time buyers, and the rising transactions costs that movers face, there are now further reasons to expect some cooling in the rate of house price inflation over coming months," added Ms Earley. 
© Adfero Ltd
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