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House price gain: boon for landlords

Monday, February 01, 2010

Source: Catherine Deshayes

Nationwide's January house price index has prompted lettingsearch.co.uk director, Phil Calderbank, to observe: "The upward trend for house prices is a further boon for the lettings market, as it is certain to convince potential first-time buyers to continue to let"...

According to the building society, the average value of a UK home increased by 1.2% in January and Mr Calderbank points out: "While recovery in the housing market outstrips that in the wider economy, buyers are likely to be wary of getting their fingers burnt, with many more choosing to let in the interim."

He adds: "If rising house prices and burgeoning inflation lead to an earlier than anticipated hike in interest rates, affordability will be even more stretched, resulting in a sustained high demand for lettings accommodation."

Nationwide's chief economist, Martin Gahbauer, agrees that the rebound in UK house prices has gone some way beyond the recovery in the overall economy, meaning the potential for further house price rises will be limited by affordability, particularly if interest rates rise.

Source: www.homemove.co.uk