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Healthy demand for cheap mortgages

Date: Wed, 01 Feb 2006

The continued property boom means there is a strong demand for cheap mortgages.

The most recent Nationwide house price report shows that 2006 has started with a healthy outlook – with prices increasing by 1.4 per cent in January and therefore the annual growth rate is now set at 4.4 per cent.

The index estimates that the average house price is £158,478 compared to £151,757 at the same period in 2005. As house prices rise it is likely that wannabe homeowners will be shopping around to gain the most competitive and cheap mortgages in order to lower their monthly outgoings.

Fionnuala Earley, Nationwide's group economist, said: "We think that at least part of the pick up in the market since October reflects a release of some pent-up demand following the cut in interest rates in August and the increased confidence on the part of buyers and sellers."

Nationwide are also predicting that the ongoing pickup in mortgage approvals will help the mortgage continue to strengthen over the coming months. A total of 115,000 mortgages were approved for house purchases during November – a significant increase on the low of 75,000 in January 2005.


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