Housing market is witnessing an increasing amount of inflationary pressures. Inflation levels have reached double digits for the first time during the last three years as per a recent Nationwide Building Society report.

The report revealed that housing prices have increased 10.5 % over the last one year. A house costs around £167,802, in UK now which is only 10% less than the peak prices recorded in October 2007 before the start of global economic crisis.

Financial analysts feel that while these figures may bring cheer to the housing market in the short term, the long term outlook remained subdued. Real estate experts feel that a lot of other factors also need to be monitored in the market.

Some fell that the prices have reached their peak levels and may not go up further. It is being argued that spending cuts after the general elections may slow down demand in the coming days.

Economists feel that the overall state of the economy also needs to improve significantly for the turnaround in the housing market. The mortgage market also conditions also need to improve for better demand.

The increased tax rates and rates of mortgages will also pot a spanner on the sale of houses in the long run. The economy is still not out of the woods and a broad based economic recovery will eventually help the housing market to grow, argued economic experts.