House price rise catches analysts by surprise

House prices continued to grow steadily in September despite widespread predictions that they would fall.

The Nationwide House Price Index puts the average property value in the UK at £184,723, signalling a 0.7 per cent month-on-month increase.

The level of growth is up on the 0.6 per cent figure recorded in August and shows that the recent financial turbulence has had little effect on the market.

Looking at the wider picture, Nationwide said that it does not see the Bank of England increasing the base rate of interest in the coming months.

"Events of the past two months now appear to mark a clear turning point in the interest rate outlook," said the firm's chief economist Fionnuala Earley.

"In early August, most observers were still predicting that the MPC [Monetary Policy Committee] would move to raise base rates to six per cent by November at the latest. However, sentiment has changed significantly.

"The likelihood is now that we will see a cut in base rates early in 2008, which is good news for mainstream borrowers and those coming off fixed-rate deals," she added.

It would also be good news for anyone with a poor credit mortgage, bad credit mortgage, adverse credit mortgage, problem mortgage, bad debt mortgage, CCJ mortgage or an IVA mortgage.

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