3.9% Rise in House Prices in One Year

UK house prices recorded their biggest year-on-year increase for nearly three years in July, according to the Nationwide building society.

Annual price growth hit 3.9%, the lender said, which meant the average home cost £170,825 and average prices rose by 0.8% compared with June, with the building society describing the increase as "robust". However, it said that housing remained in relatively short supply, as rental costs were still rising.

Buyer confidence

Property prices a year ago were falling, according to the Nationwide's calculations, so this was part of the explanation behind the large annual change. However, the lender's chief economist, Robert Gardner, said that average prices were 12% higher than the lows seen during the financial crisis. The latest figures do not suggest a return to a housing boom - prices remain 10% lower than the record highs of 2007. Instead, Mr Gardner pointed to the slight pick-up in the economy in general as well as "modest" rises in employment levels as reasons behind buyers becoming more confident. Government schemes, such as Funding for Lending and Help to Buy, have also made it a little easier for potential buyers to secure a mortgage, he said.

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