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House price rises

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During January 2010, UK house prices rose by 0.6%, according to the BBC.  House prices have now risen for 6 months in a row.  When combined with a recent fall in unemployment, such sustained house price increases suggest that the UK economy is beginning to recover from the recession.  However, some commentators have been less than enthusiastic about January's house price increase.  For instance, the increase is less than the 1.1% average increase during the preceding 5 months.  In addition, whilst low interest rates have fueled demand from those with sufficient capital to enter the housing market, first time buyers are still experiencing a 'mortgage bottleneck'.  Nevertheless, the 0.6% increase is a positive development.

 

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