House prices continue to rise

For a seventh month in a row the UK housing market has grown, according to the Nationwide index.

With mortgage deals starting to become available, job security returning to the employment market and interest rates still at 0.5%, people are beginning to gain confidence in the economy again.

Nobody wants to put a negative slant on this news, but more a realistic approach. Why has this happened?

We have a thought, but let us know what you think...

House builders have struggled due to the economic crisis and this has resulted in many going into administration, thus less companies are building properties.

Home owners have witnessed their asset (their house) drop in value - year on year house prices are down by 2.7%. People don't want to sell if they don't have to and seem determined to hold on.

With more first time buyers, property developers and people looking to 'get a good deal' in the market they are hunting for houses but there are few available.

The issue is supply vs. demand. Supply is down at the moment but demand has increased. This means people will have to pay more money as they compete against more people for fewer properties.

If this changes - more house builders start building houses again or the prices creep up and more people are willing to sell - we can see house prices sharply declining.

What do you think?

Sliding Mirror Wardrobes business analyst team