/24-7PressRelease/ - LONDON, UK, July 08, 2006 - UK witnesses an ordinary increase in the house prices in the month of June keeping it up with the last three months price. With the UK mortgage debt reaching a new height, the low increase in the house prices is a relief to most of the Britons.
The Nationwide house price index reveals that UK house prices have just increased 0.3 per cent in June. The report also states that in the last three months, prices have risen to one per cent which is five per cent higher than in the same month last year.
It is believed that the high house prices and unavailability of properties in the market is balancing the market. Nationwide group economist, Fionnuala Earley observed that that could be a response to faster house price growth through the spring, and might support further price rise in the short term.
She reasoned that the focus on the World Cup might mean lower activity in June which would seem more in line with the house purchase approvals data from the Bank of England which had shown a softening trend.
She further added that the deterioration in affordability and its likely impact could not be ignored. People with average earning pay 42 per cent of take home pay towards mortgage repayments.
Ms. Earley also pointed out that while the earning growth remained lower than house price growth the ability to pay constraint would continue to bite. She included lending constraint in her list in terms of income multiple and loan to value limits, especially for the young first time-buyer.
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