Nationwide predicts 6% rise in house prices


Britain's biggest building society predicted that house prices would rise by 5%-6% in 2007. Nationwide also said it expected prices to end this year up 8%. That was an upwards revision of its forecast in August that they would rise 5% this year, which was itself an increase on the previous prediction of 0%-3% annual growth...

From the Guardian

Looking like house prices could be rising, does this mean that the housing market is on the up or will increased prices mean that first-time buyers can't get on the housing market anymore causing it to fall.

One thing it will certainly mean is that mortgage lenders will need to re-think how and to whom they lend money to buy a house.

The Nationwide now use a 4½ income multiplier rather than their original 3½ multiplier when working out how much they will lend you. Interest only mortgages are also available which means you pay less per month, but at the end of the term still owe the amount you borrowed.

This does mean that debt and debt problems could rise as people overstretch themselves financially in order to become a homeowner.

Posted: Mon - November 20, 2006 at 08:00 PM         | |

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