UK house prices rose in July at the fastest rate in three years according to a Nationwide survey released on Friday.
It stated that signs of a modest improvement in wider economic conditions and a further gain in employment had lifted buyer sentiment.
An improvement in the availability and reduction in the cost of credit was also boosting the demand for homes. This increased demand has led to a surge in house building and has driven the UK construction industry to its fastest rate of output growth in three years.
A further survey of purchasing managers showed that house building was by far the strongest category in the construction sector increasing at its fastest pace since 2010. This comes amid growing signs that the housing market is starting to recover and follows the Government’s “Help to Buy” scheme launched in April.
House building has recorded growth for six consecutive months, but there were positive signs in other parts of the construction industry. Civil engineering returned to growth in July while commercial construction output rose at its fastest pace in more than a year, far outstripping economist’s forecasts. It also showed a solid increase in construction employment levels and the strongest degree of positivity since May 2010.
There was a note of caution expressed in certain quarters that growth seems to be narrowly focused on housing activity. Only time will tell if this is just another false dawn.
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