House prices in the UK edged up by an average of 0.5 per cent in October 2014, according to the latest Nationwide House Price Index. Property values are now an average of £189,333, down 9 per cent on October last year.
This is the second consecutive month where annual growth has fallen.
“A variety of indicators suggest that the market has lost momentum,” comments Robert Gardner, Nationwide’s Chief Economist. “The number of mortgages approved for house purchase in September was almost 20% below the level prevailing at the start of the year. Some forward looking indicators, such as new buyer enquiries, suggest that activity may soften further in the near term, especially in London.”
“However, broader economic indicators remain positive. The labour market has continued to improve, with the unemployment rate falling to 6% in the three months to August and mortgage rates have fallen back towards all-time
lows. Indicators of consumer confidence have also remained close to recent highs.”
“If the economy and the labour market remain in good shape,” predicts Gardner, “activity is likely to pick up in the quarters ahead providing mortgage rates do not rise sharply.”
He adds that the housing market “should be able to cope” with higher interest rates, which are expected to be increased in the first half of 2015, as long as they are gradual – which guidance from the Bank of England suggests – and the economy and labour market remain in good shape.
Source: The Movechannel