Since July 2010, the house prices in the UK have increased, at a very fast rate. In the last three months, the rate was the highest in the last three years. The house prices increased almost 6.5% in November, compared to the same period, last year. The rise in October, compared to last year was hardly 1%.
Reason for the hike
The policies laid by the government are aimed at increasing the credit availability to the citizens. This is the main reason for the hike in the house rates according to Robert Gardner, Chief economist of Nationwide. According to him, this improvement in the economy will bring a brighter shift to the labour market and economic outlook.
Effect of BoE and ‘funding for lending’
Robert Gardner did not refer to the BoE’s decision on boosting mortgage lending. From January, the funding for lending scheme would stop providing incentives for the mortgage lending and will focus on lending to the small firms.
In the last three months, the British economy has grown faster than it has, in the last three years. The rate in this month is a little less than the rate in September which was the highest in the last six years.