Annual house price growth rises to 2.4% in October, Nationwide reports
Annual house price growth in the UK increased slightly to 2.4% in October, up from 2.2% in September, according to the latest Nationwide House Price Index. On a monthly basis, prices rose by 0.3% after seasonal adjustments.
“The housing market has remained broadly stable in recent months, with house prices rising at a modest pace and the number of mortgages approved for house purchase maintained at similar levels to those prevailing before the pandemic struck,” said Robert Gardner, chief economist at Nationwide. “Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before COVID struck and house prices are close to all time highs.
“Looking forward, housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect. Borrowing costs are also likely to moderate a little further if bank rate is lowered again in the coming quarters. This should support buyer demand, especially since household balance sheets are strong – indeed, in aggregate the ratio of household debt to disposable income is at its lowest for two decades.”
“Homeowners may have been expecting a Halloween fright with house prices easing as a result of Autumn Budget uncertainty, but this simply hasn’t been the case,” said Marc von Grundherr, director at lettings and sales agency Benham and Reeves.
“The UK property market continues to demonstrate the remarkable resilience that has been the theme throughout this year, with buyers still motivated and transaction activity holding firm. London, in particular, remains an ever-present source of strength, proving that even in the face of political and economic jitters, the capital’s market refuses to be spooked.”
Nathan Emerson, chief executive of industry body Propertymark, also commented on the latest house price figures from Nationwide. He noted that while it is encouraging for existing homeowners to build more equity, it has become increasingly challenging for first-time buyers to secure a place on the property ladder.
“Three base rate dips have helped increase consumer affordability; however, we still have a rate of inflation that is near double what the Bank of England is hoping for,” he said. “We have seen Stamp Duty threshold changes disrupting sales trends for those in England and Northern Ireland earlier this year, and we now have the Autumn Budget just around the corner which may influence the smooth flow of property transactions, with many people holding out to see what changes may potentially be announced.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, agreed that the housing market continued to demonstrate an underlying resilience despite the many challenges it faced, including the upcoming Budget next month.
“While the market is a little quieter as some adopt a ‘wait and see’ approach, lenders remain keen to lend and have the funds to do so,” he added. “Falling swap rates, which underpin the pricing of fixed rate mortgages, have given added impetus to reduce rates, with Barclays and HSBC, among others, trimming their pricing in order to generate more business before the year end.”
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