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House prices rising £17,000 per year, mortgage holders told

Fri, 01 Jun 2007

Prospective mortgage holders have learnt that the price of an average house has increased by £17,000 in the last 12 months, according to the latest industry figures.

Data from financial services provider Nationwide Building Society has also indicated that the cost of an average home now stands at £181,584.

Meanwhile, the rate of house price inflation has increased marginally from 10.2 per cent in April 2007 to 10.3 per cent this year.

Commenting on the difficulties currently facing many would-be mortgage holders, Fionnuala Earley, chief economist at the financial services provider, acknowledged there was "still a question" over whether interest rates would rise further this year.

Consequently, she urged first time buyers not to overextend themselves when searching for a mortgage deal.

"Higher interest rates, with the threat of more on the horizon, should signal caution to those thinking about stretching themselves to get a foot on the ladder," she said.

In the past 12 months, the Bank of England has raised interest rates on four separate occasions.

As many homeowners on tracker mortgages may already be aware, the base rate now stands at 5.5 per cent.

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