We offer all the tools necessary for landing the full scope of business you really deserve.
Feel free to call us: +34 617 369 878

UK house prices hit new record in October, says Nationwide

Posted by: In: Real Estate 30 Oct 2014 Comments: 0 Tags: , , , , , , , , , , ,
With new buyer inquiries down, the London market could suffer, says the Nationwide

Average UK property prices have reached a high of £189,333, but annual growth has slowed to 9% and falling new buyer inquiries could see the market softening in London, says the top building society

Although UK annual house price growth continues to slow, house prices still hit a new record, according to the latest data from the Nationwide.

UK house prices rose 0.5% in the month of October, reversing a 0.1% fall in September, but annual growth slowed 0.4% to 9%, the Nationwide’s House Price Index shows.

The average UK house price in October is £189,333, just £27 higher than the previous high in August, but almost £1,000 up on September.

October is the second consecutive month where annual growth has fallen – but the market could pick up in future, says the leading UK building society.

Robert Gardner, Nationwide’s Chief Economist, says with RICS data showing lower new buyer inquiries in London, its market, in particular, could suffer.

“A variety of indicators suggest that the market has lost momentum. 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, activity is likely to pick up in the quarters ahead providing mortgage rates do not rise sharply.”

The Nationwide’s October figures come days after Land Registry figures for September suggested UK house prices fell 0.2% in September, the biggest drop in almost a year, and by 0.7% in London. Nationwide’s seasonally-adjusted figure showed a fall of 0.1%.

Even though the Bank of England’s Chief Economist Andy Haldane recently suggested will be no rise in interest rates until next year, Mr Gardner says the housing market should be able to cope with higher interest rates, provided the increase is gradual and the economy and the jobs market remain in good shape.

“Guidance from the Bank of England suggests that the increase in interest rates is likely to be gradual, and that they are expected to settle at a level somewhat below the average prevailing before the financial crisis, which should help ensure borrowing costs remain manageable.”

Howard Archer, chief UK and European economist for IHS Global Insight, agrees that house prices will keep on rising, but at a more restrained rate.

“Even so, buyer interest in houses is unlikely to fall away with appreciable support is likely to come from elevated consumer confidence, markedly rising employment, and still low mortgage interest rates, especially as they now look unlikely to rise before mid-2015.”

By Adrian Bishop, Editor, OPP Connect
Twitter: @opp_connect

Source: OPP


Sorry, the comment form is closed at this time.