House prices rise despite mortgages getting more expensive
Published On 28 September 2007
Despite the fact that the ongoing credit crunch is making it more expensive to obtain a mortgage, house prices continued to rise in September.Nationwide's latest figures show that house prices rose by 0.7 per cent in September and that a typical home in the country now costs £184,723 - compared to £183,898 in August.
However, the data did indicate that house prices could be dropping if a more long-term view is taken. Annual house price inflation was nine per cent in the month, down from 9.6 per cent in August.
Fionnuala Earley, Nationwide's chief economist, explained: "Overall, house prices defied the gloomy predictions of some recent headlines, but their underlying growth is still on a decelerating trend."
She added that the recent financial turmoil had meant that risky mortgages had become more expensive.
"While some lenders are still willing to extend loans with little or no deposit, such products are now more expensive, reflecting the extra risk involved."
Figures from the British Bankers' Association (BBA) indicate that August's gross mortgage lending was only one per cent higher than in the same month last year.
