House price rises problematic for first time buyers

28-Jun-2007

House price growth in June rose ahead of expectations to record the highest rate of annual growth for two years, it has been revealed, further highlighting the affordability crisis faced by first time buyers.

The latest house price index from Nationwide found that the average cost of a home stood at £184,070 for June, up 1.1 per cent on May's figure.

Bloomberg has reported that this statistic is over twice as large as the growth figure predicted by its polls, with recent interest rate rises having seemingly done little to prevent price acceleration.

However, the continued growth now makes a further base rate rise in July even more likely, analysts have advised.

"The pick up during the month brings the annual rate of house price inflation to 11.1 per cent, its highest level since January 2005 and more than twice as fast as the pace of growth at this time last year," advised Nationwide chief economist Fionnuala Earley.

"The resilience of the housing market will be another component to add to the rate rise camp's argument," Ms Earley added.

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