By Andrew Batt:
Figures released by the United Kingdom’s Office for National Statistics yesterday showed that house prices are remaining buoyant despite continuing economic turmoil. But despite the latest encouraging figures, a closer examination of the data shows a somewhat different picture.
Donna Houguez, a market analyst with www.quickmovenow.com, said: “Compared with August 2011, the good news is that the average U.K. residential property price has increased by 1.8 percent. However, the bad news is that inflation has increased by more, by 2.5 percent according to the Consumer Price Index) or by 2.9 percent if you use the Retail Price Index, so in real terms house prices have fallen.”
This is backed up by recent Nationwide Building Society figures that revealed that real house prices fell in August and continued to fall in September.
While it is a fact that house prices are increasing year-on-year, until the rate of inflation is lower than the rise in house prices, the U.K. residential homes market is far from thriving.
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