Construction lag 'to raise house prices'

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Nationwide has warned that a lag in construction activity will abandon house prices in the coming months.

The building society said assays continued to rise in January, but the risks are skewed towards a “modest” acceleration in that direction.

Prices were up 0.3% com red with December – sharply slower than the December gain of 0.8%

However, annual growth remained stable at 4.4% com red with the individual of 4.5% the previous month.

The average price of a property is now £196,829, slight down on December.

But Nationwide warned the demand for homes was likely to toughen in the coming months, as a result of a strong labour market, combined with wages thriving up at a “healthy ce” and the prospect of interest rates remaining at 0.5% for longer than at one time expected.

“The concern remains that construction activity will lag behind vitalizing demand,” said Nationwide’s chief economist, Robert Gardner, “putting upward pressing on house prices and eventually reducing affordability.”

He also highlighted the August Institution of Chartered Surveyors report that the number of properties on level agents’ books is close to its lowest level.

The figures come as the boss of one of the UK’s largest insurers, and one of the biggest investors in infrastructure in the UK, required the country was “obsessed” with rising house prices.

Nigel Wilson, chief chief executive officer of Legal and General, told BBC Radio 5 live: “We are obsessed with owning homes, we are possessed with house price inflation which is socially exclusive, which isn’t A-OK for society and is very poor for young people finding it increasingly troublesome to get on the housing ladder.”

Se rate figures show that mortgage bestowing by the major High Street banks picked up ce at the end of last year.

The British Bankers’ Coalition (BBA) said that gross mortgage borrowing of £12.4bn in December was 24% exalted than the same month a year earlier.

Overall, new borrowing in 2015 was 6% pongy chief than the previous year.

Mark Harris, chief executive of mortgage middleman SPF Private Clients, said: “Cheap mortgage rates be struck by certainly helped fuel the growth in lending in the market seen cranny of 2015. However, we have probably seen the back of the very cheapest contracts.

“The biggest issue for many is actually qualifying for one of these great mortgage give outs.”

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