Nationwide-and-Halifax-indices-show-prices-still-going-up.

House prices could be even higher that current data suggests

The recent data released by the Halifax and Nationwide building societies show that house prices may have come off a little in March but that the annual rate of house price inflation was still on target to exceed all previous expectations. Whilst they both disagree on the figures released for March (Nationwide said prices went up whilst Halifax said they had come down) they both agreed that prices will grow this year by just under 9%.

The way that the figures are collated takes mortgage approvals into consideration but it does not include the purchase of property by cash buyers. Four out of ten transactions were completed by cash buyers which is a considerable chunk of the market to leave out and it is though that the price increases could be higher with these figures also taken into account. Other figures that are interesting is that cash buyers pay up to a 30% premium for their house purchases. This is 30% more than buyers that require mortgages.

This could be because they ignore valuations carried out by surveyors or maybe don’t even bother with a valuation. Because they don’t require funding from a building society and are able to go it alone they are not at the behest of surveyors and their down valuations. This means that house price inflation is likely to be higher that the current figures suggest.